Bitcoin is yet to reach a top, here’s why

  • 05 December 2020, Saturday, 17:06
Bitcoin is yet to reach a top, here’s why
Source: Pixabay

Bitcoin’s price began to climb up the price ladder in November and has now been holding on to a good price level. The current price of the digital asset was $19,107, with the traders’ constant push and pull. However, with the rising price the long-term holders in the market have also begun to realize their profits.

The Average Spent Output Lifespan [ASOL] metric, noted the movement of the older coin as the BTC price increased. It highlighted the average age of the coins being transacted and a higher value denoted the older coins were being moved. It may signify the long-term holders realizing profits.

Currently, the ASOL value has been at a high level as indicated by the chart above.

Along with the movement of older coins in the hands of long-term holders, the long-term holder supply profit has been decreasing. Even though the price rise has pushed the total amount of profit, the number of coins in profit has not seen a significant rise. This meant that most long-term holders bought their BTC under $10k and have been holding throughout most of the recent bull run.

A report from glassnode noted:

“…the increase in ASOL in late November suggests that some long-term holders stopped hodling and started realizing profits around this time.”

Even though this could be alarming news, but it was not a bearish signal.

Long-term Holders have historically realized profits before and during bull runs. Due to this the total supply held by long-term holders notably decreased before the market tops along with the LTH supply in profit. This trend can be visible in the chart under.

As the LTH realize profits they allow new retail investors to enter the market and this has been a factor in driving BTC’s largest bull markets. This could mean a top is yet to be reached.