As Bitcoin is regaining significant upward strength, a notable trend has been spotted among long-term holders as indicated by a huge drop in the average age of wallets holding BTC. The trend demonstrates shifting market dynamics, prompting the modification of positions by retail and institutional players in anticipation of future price fluctuations.
A Persistent Drop In Average BTC Holdings
A recent report from Santiment, a market intelligence and on-chain data platform, reveals that the average age of Bitcoin stored in wallets has sharply plummeted, reflecting a rise in activity among long-term holders. Data from Bitcoin’s crucial Mean Dollar Invested Age metric shows that the average age of BTC wallets has been declining since last year.
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Specifically, a drop in this metric implies that more coins have started to return to the main circulation from older wallets, offering retail investors the chance to transfer BTC among each other. Meanwhile, a rise in the indicator suggests that coins are becoming increasingly stagnant, which could influence market dynamic,s as seen between May 2021 and October 2023.
During the time frame, Santiment pointed out that Bitcoin’s average age reached a peak within 637 days at the end of the market cycle. This rise ultimately triggered unpredictable market conditions, leading to many significant downturns.
Santiment highlighted that BTC’s average age has been decreasing since the start of this bullish signal 13 months ago, particularly in mid-October 2023, falling from the initial 637 days to peak to just 466 days. Thus, on average, every coin on the network is in a wallet that is 27% younger.
The platform also noted that Bitcoin’s Mean Dollar Invested Age has dropped significantly since the start of the “Trump Pump” three weeks ago, following Donald Trump‘s victory in the recently concluded United States Presidential election held earlier this month. After the “Trump Pump,” data shows that the average wallet is now 9% younger than it was 3 weeks ago, demonstrating how much stagnant wallets have emerged from hibernation.
As a result, Santiment asserted that this Mean Dollar Invested Age line for Bitcoin should be considered as a confirmation that the cryptocurrency markets are still experiencing a relative bull market as long as it keeps declining. Due to this, there is a greater likelihood that market caps will continue to rise.
Bitcoin’s Price Advances Toward Key Barriers
Following a recent drop to the $91,000 level, BTC is surging towards crucial resistance levels once again. This rebound has fueled optimism and confidence in the crypto asset’s short-term potential, such as hitting the $100,000 milestone shortly.
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At the time of writing, Bitcoin has shattered past the $95,000 barrier, aiming at other higher levels. With a nearly 3% increase in the last 24 hours, BTC is showing strength for more upward movement. Although the crypto asset is rising again, bearish sentiment appears to be lurking around the market as indicated by a 22% decline in trading volume in the past day.
Featured image from Unsplash, chart from Tradingview.com