As the price of Bitcoin got to another all-time high, We should dive into the performance of how older coins are behaving on the network. Their performance helps determine the present state of market sentiment.
The age bands volume spent for coins that are more than three months old helps us to depict a sharp view of what occurred at the preceding all-time high. There was a growing inclination of older coins (their supplies being greater than three months old) being consumed as their price was bid higher by new entrants into the market. The spent volume share peaked during this trend which preceded the blow-off peak in price dating back to April.
Since that time, that evolution has shifted trend with rare small fresh cases of older coins that are being spent for the last few weeks. We should note that this can indicate decisive profit-taking in the crypto market as a one-off nature experience, or as a possible new growing trend of older coins being spent as market price increases. This is dependent on the way the holding opinion of participants has evolved this cycle and discovering what levels of higher prices trigger more profit-taking.
Even with the newest increment to the spent amount, the older coin behaviour is still only four percent of the existing supply spent, which did not possess much downward influence on price as it latterly broke new highs. Exerting a more extensive look at more than a one-year-old coins, the recently spent volume of this group is still comparatively small at 1.5% of supply when being corresponded to over 4% of supply being spent on a regular basis at the previous peak.
We noted that As older coins are being frequently used, they are reset thereby becoming more modern coins again. We also notice that in the waves of HODL for supply that is below three months of age which began to display unusual increases between a week to one month range.
Based on history, the supply percentage of fewer than 3 months of age will crest with all-time highs during the bull market cycle period. This records a period where long-term holder selling and fresh demand buying is exhausted. We are far from this crest period and presently still at 5-year lows.
Up till now, the older coins spent volume didn’t have much influence on this section of supply share at the moment. This symbolises that we are in the inception stages of more long-term holders for the moment enthusiastic to sell to fresh market participants. Just Like the bull market periods that happened in the past, we should expect to notice this portion of supply rise as older coins are spread to new market participants.
NOTE: The above article is from a new edition of the Deep Dive.