A technical indicator known as liveliness is increasing, historically indicating bullish market activity, suggesting that this market cycle may still have more to unfold, according to analysts.
“Liveliness continues to rise this cycle even amid lower prices, revealing a demand floor for spot Bitcoin that isn’t mirrored in the price movements,” stated technical analyst “TXMC” on Sunday.
The analyst clarified that the “elegant metric,” akin to the long-term moving average for on-chain activity, represents a cumulative total of all lifetime spending versus holding activities on-chain.
“It ascends when coins are actively transacting and declines when they are held, with adjustments made based on the age of those coins,” they added.
“Liveliness typically increases in bullish phases as supply changes hands at elevated prices, highlighting a flow of newly invested capital.”
Analyst James Check noted that liveliness has remained range-bound since the peak in 2017, up until the present.
Liveliness magnitude significantly larger this cycle
Check compared the current liveliness with that of the 2017 cycle, which marked the first “epic parabola with widespread involvement.”
The new peaks in liveliness reflect the significant return of previously dormant coins this cycle, indicating that the value magnitude is now much higher.
Interestingly, unlike 2017, where transaction values ranged from hundreds to thousands of dollars, this cycle sees transactions in the billions, Check stated.
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“We have witnessed an unprecedented volume of coin days destroyed, and I believe we have just experienced one of the most significant capital rotations and shifts in Bitcoin’s history.”
Bitcoin price begins to stabilize
Bitcoin has remained relatively stable over the last 24 hours, briefly dipping below $89,000 in early Sunday trading. It recovered to approximately $89,500 at the time of writing, in line with yesterday’s figures.
“Anything between $86,000 and $92,000 is essentially noise. There won’t be significant movement for BTC,” commented analyst and MN Fund founder Michaël van de Poppe on Saturday.
Should $92,000 be tested, “I believe we’ll break it; however, if not, prepare for a test in the low $80,000 range for a possible double-bottom pattern,” he mentioned.
“I don’t think we’re far from the bottom for Bitcoin, which should lead to a strong rally toward the end of the year and into Q1.”
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