Bitcoin “Liveliness” Indicator Signals Possible Bull Market Continuation: Analysts

A technical indicator called liveliness is rising, which has historically signaled bullish activity and may suggest that this market cycle is not yet over, analysts say.

“Liveliness continues to rise in this cycle despite declining prices, indicating demand for spot Bitcoin that is not reflected in price action,” technical analyst “TXMC” said on Sunday.

The analyst explained that this “elegant metric,” similar to a long-term moving average for on-chain activity, represents the accumulated sum of all spending over time compared to holding activity on the blockchain.

“It rises when coins are mostly being moved and falls when they are being held, scaling based on the age of those coins,” he added.

“Liveliness typically rises during bull markets when supply changes hands at higher prices, indicating an influx of newly invested capital.”

Another analyst, James Check, noted that liveliness has remained within a range from the 2017 peak until now.

Liveliness Value Significantly Higher This Cycle

Check compared the current liveliness to the 2017 cycle, which was the first “epic parabola with broad participation.”

New liveliness peaks show just how extreme the return of old inactive coins to activity has become this cycle, adding that the value magnitude is now significantly higher.

Interestingly, unlike in 2017, when transactions were in the hundreds or thousands of dollars, in this cycle, we're talking about several or tens of billions of dollars, Check noted.

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“We've seen an extremely large volume of coin days destroyed, and I believe we've just witnessed one of the greatest capital rotations and generational shifts in Bitcoin's history.”

Bitcoin Price Begins to Consolidate

Bitcoin was little changed over the past 24 hours, but briefly dipped below $89,000 at the start of trading on Sunday. At the time of writing, it had rebounded to around $89,500, where it was at this time yesterday.

“Everything between $86,000 and $92,000 is basically noise. Not much will happen for BTC,” analyst and MN Fund founder Michaël van de Poppe said on Saturday.

If the $92,000 level is tested, “I think we’ll break it, but if not, get ready for a test in the low $80,000s for a double bottom to form,” he added.

“I don’t think we’re far from a bottom for Bitcoin, and this should lead to a strong rally into year-end, carrying over into Q1.”