How does Bitcoin’s positive online sentiment affect the market outlook? Data suggests that holders are suddenly becoming more active.
The latest findings by Santiment, published in Cointelegraph Consulting’s biweekly newsletter, show that the Bitcoin Age Consumed experienced a large uptick with the recent price increase — a sign that tokens previously dormant are on the move.
The Bitcoin Age Consumed metric is found by multiplying the amount of tokens changing addresses on a certain date by the time since they last moved. It is an indicator of volatility, which often precedes a directional price shift. Over 79,955 BTC that were dormant for at least a year changed addresses on Friday, Oct. 23, pointing to a strong paradigm shift among veteran Bitcoin (BTC) traders.
Bitcoin’s Mean Dollar Invested Age, or MDIA, has also experienced a marked downtrend over the past seven days, implying short-term distribution and potential profit-taking by some long-term BTC investors. Bitcoin’s MDIA has recorded similar drop-offs near its local price tops in February and September suggesting an increased risk of price volatility up ahead.
The average sentiment toward Bitcoin has taken a complete u-turn amid its latest push past $13,000, shifting from predominantly bearish to overwhelmingly bullish over the previous 10 days. Last Friday, Bitcoin-related sentiment was the highest it’s been since May 12, the date of Bitcoin’s latest “halving.”
On the whole, positive crowd sentiment has rarely been a friend to digital assets. Over the past two years, periods dominated by bullish chatter and FOMO typically coincided with price consolidations or upcoming market corrections — not just for Bitcoin, but Ether (ETH) and other cryptocurrencies as well.
Read the full newsletter edition here to get the entire scoop, complete with detailed charts and images.
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