- Long-term BTCs remained dormant for a long time.
- Selling pressure outweighed accumulation on a daily chart.
Despite Notable Increases in Price Action, Current Level of Binary Bitcoin Coin Day Destruction in 2023 Remains Moderate Compared to Increased Destruction During 2021 Primary Bull Market, on-chain data provider Glasnode found it.
The current level of binary #Bitcoin Coin day destruction remains heavily muted compared to the continued rise in destruction during the 2021 primary bull market.
This suggests that mature coins remain largely dormant compared to their long existence… pic.twitter.com/h1uevHNvn7
— glassnode (@glassnode) May 17, 2023
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According to the data provider, this indicated that long-held Bitcoins remained inactive from their long-term baseline and have yet to change hands.
An on-chain assessment of BTC’s Mean Dollar Invested Age metric (MDIA) lent credence to this position. This metric measures the average age of the dollars invested in a given asset.
According to Sanitationwhen an asset’s MDIA increases (as is typically the case for most coins), the investments associated with that asset gradually become less active over time.
However, it becomes worrying when this value rises over a longer period of time, covering months, as this generally indicates stagnation within the network of the asset in question. Such stagnation makes it difficult for the price of an asset to rise.
Data from Santiment showed a consistent upward trend in Bitcoin’s MDIA since February, suggesting long-held tokens refused to change hands. Interestingly, this happened despite the significant price growth that marked the first quarter of the year.
Source: Sentiment
BTC traders are largely uncertain about what comes next
As the price of BTC hovers around $27,000, many traders remain uncertain about the future trajectory of the coin’s price, leading them to refrain from trading.
An assessment of the leading coin’s price movements on a daily chart revealed that selling pressure was greater than accumulation.
At the time of writing, momentum indicators remained in a downward trend. For example, suggesting that BTC may be oversold, the Money Flow Index (MFI) was 30.10. Also, below the neutral-50 line at press time, the coin’s relative strength index rested at 42.71.
Indicative of liquidity exiting the BTC market, Chaikin cash flow fell back into the negative range on May 16 and has remained there ever since. At -0.03 at the time of writing, BTC distribution outperformed accumulation.
In addition, BTC volume on the balance sheet indicated a negative -98,238k and northward at the time of writing indicated a continued increase in selling pressure.
Source: BTC/USDT on TradingView
On-chain, since BTC started trading sideways at the start of Q2, weighted sentiment fell below the midline and has remained in negative territory ever since.
This indicated that the coin has since been underwhelmed by poor investor sentiment, making it difficult to push the price above $27,000.
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However, despite the sideways movement of BTC price, key whale addresses with between 1,000 and 10,000 BTCs kept piling up. Into a new one reportSanitation found:
“Approximately 84,897 BTC have been collectively added to the largest group of addresses that typically still have non-exchange, semi-active traders.”
According to the data provider, this is ‘generally a good sign’.
Source: Sentiment