◆ The Vocabulary of the Network

Bitcoin Glossary

Plain-English definitions of every term that appears on the Bitcoin Signals dashboard. Quant terms (σ-distance, Mayer Multiple, MVRV), on-chain mechanics (mempool, hash rate, halving, UTXO), and strategy vocabulary (DCA, sell ladder, HODL). Each entry has a deep-link anchor — share or save them as needed.

Power law σ-distance Mayer MVRV Halving Hash rate Mempool Fees UTXO DCA Sell ladder Drawdown HODL

◆ Quantitative

The math vocabulary

Power law#: A relationship of the form y = a · x^n. In Bitcoin's case, plotting log₁₀(price) against log₁₀(days since genesis) yields a remarkably straight line — i.e. price is a power of time. Giovanni Santostasi (PhD physics, retired LSU) is the most cited proponent of the model. Live fit on the dashboard: n ≈ 5.64, residual σ ≈ 0.30 in log-space.
σ-distance (sigma-distance) from trend#: How many residual standard deviations price is away from the fitted power-law trend, measured in log-space. A z-score on the residuals. 0σ means exactly on trend. +1σ ≈ 2× trend price. −1σ ≈ half. Bitcoin rarely closes beyond ±2σ — those zones are historically the cycle extremes.
Log-log regression#: Linear regression performed on the logarithms of both axes. If the relationship between two variables is a power law (y = a · x^n), taking log of both sides linearizes it: log y = n · log x + log a. Ordinary least squares on the log-log scatter recovers n as the slope and log a as the intercept.
Mayer Multiple#: Ratio of current spot price to the 200-day simple moving average. Coined by Trace Mayer. Values above 1.0 mean price is above its long-run average; values above ~2.4 have historically marked cycle peaks (often briefly). Values below 1.0 mark accumulation zones.
MVRV ratio#: Market Value to Realized Value. Numerator: market cap (price × supply). Denominator: realized cap (the cap valued at the price each individual coin last moved on-chain). Ratios meaningfully above 3 historically precede drawdowns; below 1 marks deep accumulation. Our dashboard surfaces a market-cap-trend approximation; rigorous MVRV requires UTXO-level data.
Drawdown#: Peak-to-trough percentage decline of an asset's price (or a portfolio's value). Bitcoin's cycle drawdowns have been 75–85% in every cycle since 2011. Drawdown is typically what causes investors to capitulate and sell at the bottom — knowing your tolerance for it is more important than knowing the right entry.

◆ On-chain

Network mechanics

Halving#: Programmatic event every 210,000 blocks (about every four years) where Bitcoin's block subsidy paid to miners is cut in half. Started at 50 BTC per block in 2009; currently 3.125 BTC after Halving 4 (2024-04-19); will become 1.5625 BTC after Halving 5 (estimated 2028). Anchors Bitcoin's four-year market cycles.
Block height#: Sequential index of the most-recently-mined Bitcoin block. Genesis block is height 0. Each new block adds one. Useful as a deterministic time signal — block height advances on average every ~10 minutes regardless of clock time.
Hash rate#: Total computational work being applied to mine Bitcoin, measured in hashes per second. Modern values are quoted in EH/s (exahashes/sec, 10¹⁸). Higher hash rate makes the network harder to attack — to rewrite recent blocks an attacker would need to outpace the entire honest mining population.
Mempool#: The set of valid transactions broadcast to the network but not yet confirmed in a block. Each node maintains its own mempool. A growing mempool indicates demand for blockspace exceeding supply — fees rise to compete for inclusion in the next block. Measured in transaction count and total vsize.
UTXO#: Unspent Transaction Output. The fundamental unit of Bitcoin balances — there are no "accounts" in Bitcoin, only UTXOs. Your wallet's balance is the sum of UTXOs you can spend; a transaction consumes some UTXOs and creates new ones. The set of all UTXOs across the network is the UTXO set.
Fees (sats/vB)#: Bitcoin transactions pay miners a fee for inclusion in a block, denominated in satoshis per virtual byte (sats/vB). 1 satoshi = 0.00000001 BTC. The "vB" is a witness-discounted size measurement after SegWit. Fee rates fluctuate with mempool congestion — typical "next block" fees range from ~1 sats/vB (quiet) to 100+ sats/vB (peak demand).
vsize / vMB#: Virtual size — the SegWit-adjusted size of a transaction or set of transactions. A block has a 4 million weight unit limit, equivalent to roughly 1 vMB (virtual megabyte) of capacity per ~10 min on average. Used in the dashboard's "vMB to clear" estimate of mempool depth.
Difficulty adjustment#: Every 2,016 blocks (~2 weeks) Bitcoin retargets the proof-of-work difficulty so that the average block time stays near 10 minutes. If hash rate has grown, difficulty rises; if it shrinks, difficulty drops. The next-difficulty estimate also gives an estimated date for the next halving.

◆ Strategy

The trading vocabulary

Dollar-cost averaging (DCA)#: Investment strategy of buying a fixed dollar amount on a fixed schedule (typically weekly or monthly), regardless of price. Smooths entry timing — you buy more BTC when price is low and less when price is high. Honest backtest finding from our DCA Time Machine: lump-sum has historically outperformed DCA by 5–10× in every window since 2017.
Lump sum#: Deploy your entire intended budget on day one. No DCA, no schedule. Empirically, in long-running uptrends like Bitcoin's, lump-sum beats DCA because cash on the sidelines misses the run. But it also means full exposure to whatever the asset does next — psychologically the harder strategy to hold through a 75% drawdown.
σ-band Smart DCA#: Variant of DCA that uses σ-distance from trend to modulate buy size. The rule on our dashboard: skip the buy when σ > +1 (overheated), double the buy when σ < −1 (deeply discounted), buy normally otherwise. Total dollars budgeted equal blind DCA. Backtest verdict: barely outperforms blind DCA, sometimes underperforms — sigma-timing is a weak edge in a power-law-trending asset.
Sell ladder#: A pre-defined set of sell rules that fire at specific price or σ-distance thresholds, taking incremental profit off the table. Example: "sell 10% at σ ≥ +1, 25% at σ ≥ +2, 50% at σ ≥ +3." Each rule fires once. Useful for rules-based exits; usually underperforms HODL in long uptrends because cash from sales misses subsequent gains.
HODL#: Holding Bitcoin for the long term without selling. Originated from a 2013 Bitcointalk forum post titled "I AM HODLING" by user GameKyuubi during a price crash. The typo became a meme, then a strategy doctrine: in Bitcoin's history, holding through volatility has outperformed almost every active timing approach.
Cycle multiple#: Price expressed as a multiple of the halving-day price for the current cycle. If H4 day price was $63,508 and current price is $80,000, the cycle multiple is 1.26×. Historical cycle peaks: ~84× (Cycle 1), ~26× (Cycle 2), ~8× (Cycle 3). The diminishing-multiples pattern is real but doesn't determine future cycles.

◆ Sentiment

The market psychology vocabulary

Fear & Greed Index#: Composite index by Alternative.me that scores crypto market sentiment from 0 (extreme fear) to 100 (extreme greed). Inputs include volatility, momentum, social media volume, dominance, and trends. Contrarian use: buy fear, sell greed.
Capitulation#: The market phase where holders give up and sell at substantial losses, often near cycle bottoms. On our dashboard, σ-distance < −2 is labeled the capitulation zone — historically a rare, generationally-good entry point if you can hold through more pain.
Euphoria#: The market phase near cycle tops characterized by mainstream attention, parabolic price action, and abandonment of risk discipline. σ-distance ≥ +2 marks the dashboard's euphoria zone. Historically a high-risk window — every major Bitcoin top has been in euphoria territory.

Sources & further reading. The math here pairs directly with the methodology page, which derives the formulas. The Signals dashboard surfaces all of these terms live; deep-link to a specific term with /bitcoin-rabbit-hole/glossary#<term-id>. None of this is investment advice — definitions only.