Bitcoin [BTC]: Some conviction and a lot of hand-wringing is an indication of…

With the broader cryptocurrency market attempting to rebound after the collapse of FTX, on-chain data appears to indicate that long-held Bitcoin [BTC] has begun to see some movement.

When long-held crypto-assets change hands, it usually means that dormancy on the coin’s network is starting to dissipate and a large price increase is on the way.

In the current market, however, a closer examination of on-chain data revealed that investors’ actions to move previously inactive BTC coins were motivated by fear and a lack of conviction.

Old hands awakening

According to CryptoQuant analyst Wenry, BTC’s Average Dormancy is at its highest level since February. This metric measures the average period that every coin remains dormant from the time it was last traded. A spike in this metric indicates a rally in coin distribution.

Wenry noted that in the past, this metric usually rose “during the first technical rebound after a large price drop.” BTC traded at a two-year low due to the collapse of FTX and it has since attempted to recover. However, before this could be taken as conclusive proof of a first “technical rebound,” Wenry warned,

“If $BTC, which has not moved for a long time for a few days, moves and there is a stronger movement in the corresponding indicator in the future, it is judged that it is necessary to focus more on risk management from a trading perspective.”

Source: CryptoQuant

Also, Glassnode, in a new report, found that BTC’s Spent Volume Age Bands (SVAB) hit their highest level since the beginning of the year. The SVAB metric revealed that just 4% of all coins spent last week were sourced from coins older than three months. According to the on-chain analytics platform,

“This relative magnitude is coincident with some of the largest in history, often seen during capitulation events and wide-scale panic events.”

Source: Glassnode

Glassnode further observed that uncertainty permeated the minds of BTC long-term HODLers. The same, it said, has been “prompting the changing of hands, and/or shuffling of coins by longer-term investors.”

Finally, an assessment of BTC’s Spent Old Coin Volume older than 6 Months revealed that the metric hit its fifth-highest value in the last five years.

“In the time since FTX collapsed, a total of 254k BTC older than 6-months have been spent, equivalent to around 1.3% of the circulating supply. On a 30-day change basis, this is the steepest decline in older coin supply since the Jan 2021 bull run, where long-term investors were taking profits in the bull market.”

Source: Glassnode

It is, however, too soon to say how these observations across datasets will affect Bitcoin’s value on the charts going forward.

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