On-chain data provider Glassnode has shared its Lifespan 1y-2y (7d MA) Number of Output Spent metric, which may give the market a clue as to the source of the main selling pressure currently driving Bitcoin (BTC) and other cryptocurrencies down. The metrics show low entry rates and reserves, suggesting that the market hasn’t completely reversed itself, according to analysts. Here are the details…
Bitcoin on-chain analysis
The Glassnode indicator is designed to determine the number of outputs from Bitcoin wallets with different lifetimes. The Lifespan setting allows users to determine whether spent output is “old” or “young”. The analytical firm shared the data of the indicator in the past hours:
With Bitcoin Lifespan 1y-2y (7d MA), Number of Output Spent reached a 1-month high of 360,482. On December 19, 2021, 307,060, the highest level of the previous month, were observed.
- “Young” spenders are generally those who use cryptocurrency to earn a decent income by holding on to it for a reasonable period of time.
- “Former” spenders are often people who change trends in the market as their positions are likely to be significantly larger and have more influence on the market. In this case, the proportion of “old” spenders increased significantly, breaking the one-month record.
Metrics show the market is not fully reversing
According to historical data from the metric, a higher expense ratio of “old” assets is almost always associated with a negative price movement in the cryptocurrency market. According to analysts, the increase in spending watched on November 11 is more likely to be the catalyst for the 28% pullback of Bitcoin (BTC) observed in the market today. Lowering expense ratios are generally considered to be signals of accumulation periods in which mid- or long-term investors prefer to increase their positions or positions. The metric is often used in conjunction with foreign currency reserves and outflows. Both of these metrics still show low entry rates and reserves, suggesting that the market is not fully reversing, according to analysts.