Bitcoin Network Demand Model Update
![Bitcoin Network Demand Model Update](/content/images/size/w1200/2023/05/2021-07-12-bitcoin-network-demand-model-banner-1.jpg)
Disclaimer: Your capital is at risk. This is not investment advice.
Week 29 2021
The Network demand model remains OFF this week, with price closing yesterday at $31,824. The price has been broken support at $32k over the last few days, while volatility falls further to the 70% range.
Those that have been following the model for the last month will know that the Network Demand model remains in cash after selling bitcoin when the model moved to a 2/6 on 2nd June at $36,706.
![](https://www.bytetree.com/content/images/2023/05/2021-07-19-bitcoin-network-demand-model-86-1.png)
With not a great deal of change in the core metrics this week, there is not much to report. However, I will show you a couple of charts from the model to demonstrate the trend.
![](https://www.bytetree.com/content/images/2023/05/2021-07-19-bitcoin-network-demand-model-86-2.png)
Short term transaction value turned up after a series of high value transactions on Friday evening, summing to around $5Bn. While this was a significant flurry of activity, this does not form part of a longer trend and the indicator remains OFF.
![](https://www.bytetree.com/content/images/2023/05/2021-07-19-bitcoin-network-demand-model-86-3.png)
Long-term fees continue to diverge, far from their “ON” position in mid-June.
![](https://www.bytetree.com/content/images/2023/05/2021-07-19-bitcoin-network-demand-model-86-4.png)
Miners have continued to hold their inventory as the price weakens. MRI is now at its lowest level so far this year and remains OFF.
![](https://www.bytetree.com/content/images/2023/05/2021-07-19-bitcoin-network-demand-model-86-5.png)
The chart above demonstrates how the network demand model has behaved since the start of Jan’20. The model is long bitcoin when the score is 4 or above and holds a cash position when on 3 or lower. The bars in the background indicate the score, with the bitcoin price in gold and the model’s position in blue. While this is a low turnover strategy, it has generated a CAGR of 327% since inception versus bitcoin’s CAGR of 200%.