Recent data from CryptoQuant has shed light on a metric known as the 'Inactive Supply Shift Index,' which helps analyze the risk in the Bitcoin market. This index, crafted from historical Bitcoin blockchain data, could redefine how traders and analysts interpret market dynamics.
A New Metric in the Bitcoin Market
The Inactive Supply Shift Index measures the weekly changes in Bitcoin's inactive supply, focusing on periods ranging from one to seven years. By tracking these changes, the index provides valuable insights into the behavior of long-term holders.
Analyzing Long-term Holder Behavior
Notably, the index recently reverted to near-zero levels after a phase of deep negative readings, which previously coincided with Bitcoin’s price surge past $70,000. The Inactive Supply Shift Index reveals two critical phases in Bitcoin's market behavior. During periods of deep negative values, long-term holders who had accumulated Bitcoin were selling it, impacting the price.
The Puell Multiple Metric
The Puell Multiple, now at 0.4, hints that Bitcoin may be near a bottom, ideal for long-term accumulation. This indicator also confirms the correlation of long-term holder activity with Bitcoin price movements.
The observed trend in the Inactive Supply Shift Index and the Puell Multiple suggests a potential stabilization in the Bitcoin market. These are crucial metrics to rely on when analyzing the current state and predicting future price movements.
Comments