Here's the line of demarcation

by Ben Lilly

The Line of Demarcation

It's as if the Occupy movement from 12 years ago went out and got an MBA degree. That's what's happening now.

It started off as degenerate traders wanting tendies (good feelings from making big on deep out the money options)... It's now progressed into a movement of the working class against the elite and government. The 99% are ticked.

We all knew the system was rigged. But to do it in broad daylight is arrogance.

Now, it's probably a bit too early to call it Occupy 2.0 or the start of the fourth turning. But it's fun to think it is. To be a part of such a historical transition of the balance of power would be quite the experience. Not to mention the script written for such an event probably has in its footnotes a piece about the transfer of wealth... A transfer from the currency minted by the government to one people can trust.

If such an event ever did take place, bitcoin and cryptocurrencies as a whole would be the destination for such a transfer. It'd be labeled capital flight.

And for such an event to take place, we'd need some serious market turmoil.

With equity markets potentially peaking, many businesses still slow, stimulus checks falling short and now the recent debacle of the government forcing Robinhood to do what it did with some of the biggest venture capitalists intervening... It means if the markets went into a significant correction, like 25-40%, it'd be the spark to light a fire.

But enough about the what ifs... We want to know what the state of the bitcoin market is looking like as we enter the weekend.
Market Update
There's a metric that we want to hit on today.

It's Entity-adjusted Dormancy Flow. It's the ratio of bitcoin's market cap to how dormant bitcoins are and the price of bitcoin using an annualized figure.

Said differently, the more bitcoin that haven't moved, the lower its value. Aka the more HODL'in, the lower the value. Think of it like the smart money indicator.

Now, when dormancy rises smart money is willing to let go of their bitcoin. And when this smart money starts to sell, it's historically a great indicator of a major bull cycle.

Looking at the chart below, you can see the Dormancy Flow relative to price. The horizontal line in the middle is the bull vs. bear market threshold. The bull market is above while any reading below is considered bear territory. (Quick nod to the creator of this metric, David Puell)

As you can see, we're right at this line of demarcation. Any further up and it's a full blown major bull cycle.

With the Grayscale Effect on the horizon in early/mid February, it might prove the catalyst to drive this metric higher.

That is... unless... Just maybe... the keyboard Reddit warriors start to front run Wall Street and force them to buy bitcoin at a higher price before the Grayscale Effect kicks in... Now wouldn't that be something.

Your pulse on crypto,


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