Saturday, January 22, 2022

Blockchain indicator suggests Bitcoin could be about to bottom out

Must Read



A historically reliable blockchain indicator suggests that bitcoin may be in the final stages of a downtrend, having lost nearly 40% of its value in the past two months.

  • The Entity-Adjusted Dormancy Stream, a ratio of the cryptocurrency’s current market value to the annualized dollar value of coin dormancy, has fallen below $ 250,000. Dormancy refers to the average number of days each traded coin has been dormant or unchanged – an indicator of the spending trend of the market.
  • The below $ 250,000 area has marked major price lows in the past, as shown in the featured image provided by data analytics company Glassnode.
  • “Entity-adjusted dormancy flow recently hit an all-time low, showing a full reset of the metric. These events are historically imprinted at the lowest cyclical ” Glassnode said in a report released on Monday.
  • “Low dormancy stream values ​​indicate times when market cap is undervalued relative to the annual sum of achieved dormancy, indicating times when bitcoin is a valuable price,” added Glassnode.
  • Market cap is calculated by multiplying the total number of coins mined by the price of a single coin at any given time. At the time of going to press, Bitcoin’s market cap was $ 809.98 billion.
  • Bitcoin bottomed out in July 2021 and started a new bull run with the metric falling into the green zone. The cryptocurrency hit record highs of nearly $ 69,000 on November 10.
  • While the indicator has turned bullish again, macroeconomic factors can play the spoiler. The December US Consumer Price Index is expected to be released at 13:30 UTC can inject volatility in the market. A higher-than-expected reading of 7.1% may prompt bet on a faster tightening from the US Federal Reserve and put further selling pressure on bitcoin.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest News

What Happened at the Congressional Bitcoin Energy Hearing?

This episode is sponsored by Link, Abra and United States.Download this episodeThis week, in the...

More Articles Like This