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Home Cryptocurrency news

Uncommon Bitcoin Metric Suggests Massive Profit Taking Is Underway

Tony Spilotro by Tony Spilotro
1 year ago
in Cryptocurrency news, Bitcoin
Reading Time: 2min read
bitcoin uncommon metric
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At the start of the year, it was clear that Bitcoin was in an accumulation phase, where “smart money” buys up an asset in anticipation of a sizable increase in value during the following markup phase. According to the Wyckoff method, after the price of an asset is sufficiently marked up, comes the distribution phase when investors begin dumping the asset at a substantial profit.

An uncommon Bitcoin metric that looks at BTC held for a certain amount of time has suddenly spiked, suggesting that distribution is peaking, and massive profit-taking is underway.

Average Spent Output Lifespan of Bitcoin Reaches Highest This Year

Markets are cyclical and go through certain phases again and again. After Bitcoin was accumulated below $4,000, the crypto asset rocketed in price, causing it to rise as much as 350% from trough to peak before the first-ever cryptocurrency began to consolidate above $10,000.

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Related Reading | Bitcoin Price Breaks Below $8,500, Are Bears In Complete Control? 

The resulting consolidation was either reaccumulation or distribution, according to Wyckoff theory, however, the fact that Bitcoin broke down from support and has repeatedly made attempts to push lower suggests that the consolidation was in fact distribution – a phase where investors who accumulated an asset at the lowest prices begin to take profit.

While according to Wyckoff schematics depicting distribution, the distro phase has been taking place since June but is still ongoing even today, another key metrics suggests. In fact, this metric suggests that profit-taking is actually peaking now, and the wave of selling could be responsible for Bitcoin’s recent break below $8,500.

There is a huge spike in the Average Spent Output Lifespan (ASOL) for #Bitcoin today.

It's the highest we've seen this year. On the hourly chart, bitcoins as old as 250 days are being moved. This corresponds to mid March when the price was at ~$4,000. Profit taking here? pic.twitter.com/PYU4ToNUzV

— Rafael Schultze-Kraft (@n3ocortex) November 15, 2019

According to Glassnode data scientist Rafael Schultze-Kraft, there has been an enormous spike in the Average Spent Output Lifespan of Bitcoin today. The data analyst concludes that its the highest amount this year, and indicates that BTC as old as 250 days or more is being moved – likely to exchanges where the asset is being sold, corresponding with today’s drop.

The data “corresponds” with mid-March Bitcoin prices at around $4,000 – the same range where Bitcoin was being accumulated at for low prices before the markup phase occurred.

The rise in this metric suggesting that Bitcoin from that timeframe is being moved and potentially sold into the market, and further backs up the theory that Bitcoin is in a distribution phase, and what comes next is the markdown phase.

Related Reading | Vast Majority of Crypto Assets Lack Enough Liquidity To Make Good Investments 

During markdown phases, asset prices continue to drop until the price becomes attractive to investors once again. But with Bitcoin failing to break above $14,000 and set a new all-time high, it’s difficult to say if the former low of $3,150 or higher will be attractive enough for the investors dumping onto the market now, to accumulate once again. Instead, the markdown phase has the potential to push Bitcoin price down to new lows.

Tags: Average Spent Output LifespanbitcoincryptoglassnodeWyckoff Method
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Tony Spilotro

Tony Spilotro

I'm Tony Spilotro. Behind the pseudonym, I'm a digital media executive and global remote work leader with a decade of content experience and excellent. Here, I explore my newfound passions pertaining to privacy, finance, economics, politics, cryptography, property rights, and other libertarian-esque views. I am a Bitcoin evangelist, maximalist, and educator whenever I can be, helping to spread its message of freedom from government control, monetary policy mismanagement, and passing the buck - literally – to future generations. My journey from a curious retail crypto investor to a serious Bitcoin advocate, trader, and technical analyst is an unusual one, but life-changing nonetheless and has become less about money and more about a long-overdue revolution. While a firm believer in the laws governing math and science, I am profoundly fascinated by the impact of astrology and astronomy including moon and solar cycles and planetary alignment and their ability to influence and potentially predict markets. It hasn't yet clicked for me as to how to put anything to use, but I consider it my current rabbit hole I can't yet dig out of. My perspective of growing up alongside the internet, the dot com era, the Great Recession, and roots in video games collecting coins and rare items caused Bitcoin to immediately make sense to me. Through all of these lenses, I seek to produce content that is educational and entertaining, and I thank you sincerely for taking the time to read what I have to say. Please follow me on Twitter and feel free to drop me a line if you would like to work together.

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