Accoridng to an important indicator, it seems that a Bitcoin reversal could be much closer than we think. Check out the latest reports about all this below.
Bitcoin reversal around the corner?
At the moment of writing this article, the crypto market seems to be making efforts to recover following recent price losses. Bitcoin is trading gin the green and the king coin is priced a bit above $20k.
A popular crypto analyst is highlighting a key metric while assessing the future for Bitcoin (BTC) amid faltering markets.
The anonymous host of InvestAnswers talked not too long ago about the significance of Bitcoin’s dormancy flow, which measures the average number of days that coins have remained untouched.
“This dormancy flow is kind of interesting for a few reasons. First of all, the asset Bitcoin is obviously trading below its fair value as HODLers, including long-term ones, are kind of liquidating.”
He continued and also said:
“This is generally the case when the oldest coins are being spent. It’s like the whole dormancy thing, it’s when the HODLers stop spending and reverse buying behavior, that is the key reversal to watch for.”
The analyst next points out how Bitcoin dormancy has fallen to a 10-year low. He also made sure to add the fact that historical data suggests that such lows precede price moves to the upside.
“If you look at this chart, I added a little gray thing saying a ‘decade low.’ It actually technically is an all-time low because the data from pre-2010 was kind of not really analyzable enough because there wasn’t enough of it.”
He continued and said the following as per the Daily Hodl:
“But this decade-low dormancy flow is interesting. We have to wait and watch for that to peak up. Every time in history it spikes down, it tends to reverse course very quickly.