Bitcoin ‘Liveliness’ Hits New High, Signaling Ongoing Bull Cycle
Bitcoin’s on-chain “liveliness” metric has climbed to new highs, a move analysts say is consistent with ongoing bull-market activity despite recent price softness.
On Sunday, technical analyst “TXMC” said liveliness continues to rise this cycle even as prices are lower, indicating an underlying base of spot demand that is not fully reflected in market pricing.
The metric, described by TXMC as an elegant, long-term gauge of on-chain activity, tracks the cumulative balance between coins being spent and coins being held. It increases when spending exceeds holding and declines when holding predominates, with adjustments based on coin age.
According to the analyst, liveliness typically trends higher during bull markets as supply changes hands at elevated prices, signaling inflows of new capital.
Analyst James Check noted that liveliness had been confined to a range since the 2017 peak, until the recent breakout.
Bitcoin liveliness has reached a new peak. Source: Glassnode
Liveliness magnitude is much larger this cycle
Check compared current readings to the 2017 cycle, which he described as the first “epic parabola with widespread participation.” He said the latest peaks underscore how significant the return of long-dormant coins has been this cycle, adding that the value involved is considerably larger than in prior periods.
Unlike 2017, when typical transaction sizes were in the hundreds to thousands of dollars, Check said this cycle has seen flows in the several to tens of billions of dollars.
He added that the volume of coin days destroyed has been unusually high and characterized recent activity as a major rotation of capital and a shift in ownership within the Bitcoin market.
Bitcoin price begins to consolidate
Bitcoin was little changed over the past 24 hours, briefly dipping below $89,000 in early Sunday trading before recovering to around $89,500 at the time of writing, roughly in line with the prior day.
Michaël van de Poppe, founder of MN Fund, said on Saturday that price action between $86,000 and $92,000 is largely noise and that limited movement is expected within this band. He added that if $92,000 is tested, a break higher is likely; otherwise, the market could revisit the low $80,000 range to form a potential double-bottom pattern. Van de Poppe also said he does not believe a bottom is far away and anticipates a stronger rally toward the end of the year and into Q1.
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