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Bitcoin: sharp rise for the Token Age Consumed
Bitcoin: sharp rise for the Token Age Consumed
Bitcoin

Bitcoin: sharp rise for the Token Age Consumed

By Marco Cavicchioli - 2 Apr 2020

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Santiment has published a chart showing how bitcoin’s Token Age Consumed metric spiked yesterday just before the price increase. 

In fact, about 75 minutes before the rise began, which took the price of BTC from about $6,200 to over $6,700, there was a huge spike in the value of this parameter

This is a somewhat complex parameter, which measures the amount of tokens that have been moved from one public address to another in a given time period multiplied by the number of days since their last movement. 

It is a useful metric for understanding the direction the price might take and in particular the significant variations in case of strong changes. 

Santiment adds nothing else, but it does suggest that this huge movement of long-held tokens in such a short period of time could suggest a strong price movement in the short term

Looking at the historical values of this parameter, it seems that even in the past when such spikes occurred, in the following days the price of BTC has increased significantly, well above the +8% occurred yesterday. 

For example, a previous spike occurred on July 29th, 2019, when the price of bitcoin was about $9,600, right before it rose to $11,900 on August 6th, an increase of 24% in just over a week. 

However, the historical peak of the Token Age Consumed metric calculated by Santiment occurred on November 29th, 2018, which is when the price plummeted – reaching a post-bubble low in December 2018. 

As such, there is no obvious indication that a peak for the Token Age Consumed parameter could point to a price increase, but given that the past peaks that occurred at times when the price was not falling have often been followed by significant price rises, this is a scenario that may repeat itself these days. 

 

Marco Cavicchioli
Marco Cavicchioli

Class 1975, Marco teaches web-technologies and is an online writer specializing in cryptocurrencies. He founded ilBitcoin.news, and his YouTube channel has more than 11 thousand subscribers.

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