A technical indicator called liveliness is rising, which historically signals bull run activity and could mean that this market cycle is not over yet, say analysts.
“Liveliness continues to march higher this cycle despite lower prices, indicating a floor of demand for spot Bitcoin that is not reflected in price action,” said technical analyst “TXMC” on Sunday.
The analyst explained that the “elegant metric,” which is like the long-term moving average for onchain activity, is a running sum of all lifetime spending compared to holding activity onchain.
“It rises when coins are net transacting and falls when they’re being held, scaling by the age of those coins,” they added.
“Liveliness usually rises in bull runs as supply changes hands at higher prices, indicating a flow of newly invested capital.”
Fellow analyst James Check observed that liveliness has been range-bound since the 2017 peak, up until now.
Liveliness Magnitude Much Larger This Cycle
Check compared current liveliness to the 2017 cycle, which was the first “epic parabola with widespread participation.”
The new liveliness peaks show how extreme the return of old dormant coins is this cycle, he said, adding that the magnitude of value is now much higher.
The intriguing part is, unlike 2017, where transactions were in the hundreds to thousands of dollars changing hands, this cycle, it is in the several to tens of billions of dollars, stated Check.
“We have seen an extraordinary volume of coin days destroyed, and I am of the view we have just watched one of the greatest capital rotations and changing of the guard in Bitcoin history.”
Bitcoin Price Starts to Consolidate
Bitcoin hasn’t moved much over the past 24 hours but briefly dipped below $89,000 in early Sunday trading. It had recovered to around $89,500 at the time of writing, where it was this time yesterday.
“Anything between $86,000 and $92,000 is pretty much noise. Not much will happen for BTC,” opined analyst and MN Fund founder Michaël van de Poppe on Saturday.
If $92,000 gets tested, “I think we’ll break it, but if not, brace yourself for a test at the low $80,000 range for some sort of double-bottom pattern,” he added.
“I don’t think we’re far off bottoming for Bitcoin, and that should result in a strong rally at the end of the year, going into Q1.”