Discovering prices beyond $ 20,000 was a pipe dream for institutional and retail traders two weeks ago. Now, with Bitcoin trading at $ 23,511 at the time of writing, there is much anticipation about further price discovery. Interestingly, the mean transaction volume of Bitcoin (2d MA) has dropped significantly in the last 24 hours, with the current value down 20% from 8.5 BTC to 6.86 BTC
Now, in light of the said data from Glassnode, as transaction volume plummets, will the price drop as well? Well, this would be an indication of a correction, rather than finding prices further than the BTC press time price.
The fall in mean transaction volume suggests that network activity is declining. With retail traders getting used to trading Bitcoin above $ 23,000, activity declined and this could be attributed to the fall in demand on random exchanges. There are more traders who have created a sales wall than those who are lining up to buy Bitcoin as it continues to be undervalued at the current price level.
Whether or not this implies disadvantage, the same can be explored through another metric – Bitcoin Expended Outputs. Bitcoin Expended Outputs have increased significantly, based on data from Glassnode.
Bitcoin’s spent outputs have risen and the last time this happened, the price of the cryptocurrency climbed steadily on the charts. It traded above the $ 19000 range for a long time, before crossing $ 20,000 and finding the price further. This may be a sign of discovery beyond the BTC press time levels, closer to the $ 25000 range, once there is further stability and a decrease in volatility.
It is also important to consider that active supply is climbing steadily, which means more than one thing. On the one hand, increased network activity is directly linked to increased transaction volume, transaction volume and bullishness. On the other hand, it is associated with price discovery further above its press time price level.
Based on the chart, the largest% of obsolete Bitcoins were purchased in active supply in 2020. These charts suggest that a correction may be due, however, the price rally and the n holding above $ 23,000 suggests the result may be contradictory. It is possible, therefore, that the price could continue to climb towards $ 25,000 gradually.