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Breaking News: Bitcoin, XRP, Ethereum Dip Post Fed's Rate Cut: What’s Next For Crypto?
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Breaking News: Bitcoin, XRP, Ethereum Dip Post Fed's Rate Cut: What’s Next For Crypto?

These Two On-Chain Signals Precede Bitcoin Falls, Suggests Analyst

Keshav Verma
Keshav Verma
Last Updated: June 11, 2024 2:26 pm
3 mins read

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An analyst has suggested that two on-chain signals may be used to predict Bitcoin falls as they seem to have historically preceded drops in the crypto’s price.

Bitcoin Selling Of 7yrs-10yrs Old Coins Spiked Up Recently

As pointed out by an analyst in a CryptoQuant post, BTC dumping of coins aged between 7 years to 10 years and ETH dominance rising up can be two signs to look for before falls in the coin’s value.

The first indicator of relevance here is the “Spent Output Age Bands,” which checks for on-chain movement of coins and tells us which age groups were responsible for them.

The different “coin age groups” in the market include coins based on the total amount of time they were sitting idle for before being moved or sold.

The group in question here is the “7 years to 10 years old” cohort. The Spent Output chart for this group, therefore, shows how many coins were moved that were previously sitting idle for periods in this range. Here is the graph for it:

Bitcoin  Long-Term Holder Selling

The value of the metric seems to have spiked up in recent days | Source: CryptoQuant

As you can see in the chart, the quant has marked the relevant points of trend for this Bitcoin indicator as well as the corresponding BTC price.

The analyst explains that whenever the spending of the 7 years to 10 years age band exceeds 5000, BTC usually observes a downtrend in its value.

Related Reading: Bitcoin Monthly Stats: Cost Basis, Long-Term Holders, And The Cyclical Bottom

Out of the 7 times the signal was seen during the last few years, only once did the price not register a plunge down.

Ethereum Dominance Was Also Elevated In Recent Weeks

The other indicator that the analyst believes to be of note is the “ETH dominance,” which is a measure of the total crypto market cap percentage share for Ethereum.

The below chart shows the trend in this metric over the last few years.

Ethereum Dominance vs Bitcoin

Looks like the value of the metric has been high recently | Source: CryptoQuant

It seems the Ethereum dominance exceeding the 20% mark has also been a bearish sign for Bitcoin during this period.

In conclusion, the analyst suggests that proper use of these two indicators in conjunction may help investors prepare for downtrends in the future.

Related Reading: Quant Explains How Whales Moved Before And After Ethereum Merge

At the time of writing, Bitcoin’s price floats around $18.7k, down 16% in the last seven days. Over the last month, the crypto has lost 18% in value.

The below chart shows the trend in the price of the coin over the last five days.

Bitcoin Price Chart

BTC's value has plunged down over the last day | Source: BTCUSD on TradingView
Featured image from Bastian Riccardi on Unsplash.com, charts from TradingView.com, CryptoQuant.com
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Keshav Verma
Keshav Verma

Keshav Verma

Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.

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Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.

In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.

Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.

Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..

Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.

Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.

As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.

Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.

Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.

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Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality
Created by industry experts and meticulously reviewed
The highest standards in reporting and publishing
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Strict editorial policy that focuses on accuracy, relevance, and impartiality

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