The largest cryptocurrency in the world, Bitcoin [BTC], has had a rough patch in the past few weeks.
With a near-term weakness spotted across some of the coin’s significant on-chain metrics, the price of BTC continues to plummet even with minimal additional sell-side pressure on-chain, Glassnode found in a new report.
According to Glassnode, all asset markets, including Bitcoin, equities, forex, and bond markets, logged declines in the last week.
Impacted by a drawdown in the general financial markets, the continued decline in the price of BTC, despite very little sell pressure, indicated a drop in demand for the crypto asset and an investor base looking to exit the market at any cost.
The first fundamental metric Glassnode considered was the coin’s Average Spent Output Lifespan (ASOL). According to Glassnode Academy, this metric provides insight into the lifespan of coins on a per transaction output basis that is spent daily.
When this metric posts a high value, it means that a large number of old coins are seeing some action. They could be realizing profits, capitalizing on the strength of a bull market, or have reduced the conviction to hold the coin.
On the other hand, when ASOL logs a low value, it means that newer coins dominate day-to-day network activity, leading older transaction outputs to remain dormant, and the conviction to continue holding the particular coin is high.
According to its new report, Glassnode found that BTC’s ASOL has been on a gradual decline since the beginning of last year. Although it rallied in recent weeks as a group of older coins was spent, this was merely ephemeral, Glassnode found.
With a sustained decline in price action without a high value in ASOL, Glassnode concluded that “the
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