Exits of “old spenders” increase as Bitcoin drops 2.5%
The Glassnode Alerts on-chain data provider has shared the Number of Spent Outputs with Lifespan 1y-2y (7d MA) metric that might give the market a hint about the source of the main selling pressure that is currently driving Bitcoin and other cryptocurrencies down.
Indicator of the number of exits spent
The Glassnode indicator is designed to determine the number of exits from Bitcoin wallets with different lifetimes. The Lifetime setting allows users to determine whether the outputs spent are “old” or “young”.
While “young” spenders might not have the same effect on the market as “old” spenders. Short-term holders are usually the ones who entered the asset shortly before selling it in order to generate moderate revenue by holding the asset for a moderate time.
The “old” spenders, on the other hand, are usually those who move or change trends in the market, as their position is more likely to be significantly larger and have more impact in the market. In this case, the spending rate of “old-timers” increased dramatically, breaking the one-month record.
History of “old” coins being spent
According to the historical data from the metric, the higher spending rate of “old” entities almost always correlates with a negative price action on the cryptocurrency market. The spending spike tracked on Nov. 11 was more likely the catalyst of the 28% retrace of Bitcoin observed by the market today.
Falling spending rates are generally seen as a signal of periods of accumulation in which mid- to long-term investors prefer to increase their positions or holdings in general. The metric is often used with foreign exchange reserves and outflows. Both of these metrics still show low entry rates and reserves, indicating that the market has not fully reversed.
