Daily Bitcoin On-Chain Snap #12

Spending Volume for old coins is at multi-year lows

The structural downtrend in old-coin volume dominance continues this week, reaching a multi-year low of around 2%. In the pre-bull phase of 2019-20, old-coin volume represented around 4% of all volume moved on-chain as a baseline. This spiked in late 2020 and early 2021 as long-term investors took profits in the bull market. Young coin dominance is at multi-year highs, which indicates the same liquid supply is transacting and likely being absorbed by new buyers. This is a bullish sign, as old hands continue to have strong conviction and are unwilling to sell at current levels.


Bullish setup in Difficulty Ribbon last seen in 2018 Capitulation

The Difficulty Ribbon is an indicator created by Willy Woo that uses simple moving averages (200d, 128d, 90d, 60d, 40d, 25d, 14d) of the Bitcoin mining difficulty. Historically, periods when the ribbon compresses have been good buying opportunities. Similarly, the difficulty ribbon is also about to flip over and signal full recovery, as the slowest 200-day moving average crosses over the fastest 9-day moving average. The only comparable difficulty ribbon flip to the current market was following the December 2018 bear market capitulation event. In addition, the 2018-19 mining recovery took a total of 164 days to completely reverse the bearish difficulty ribbon signal. This is bullish for BTC as the current market has been in recovery for 120 days.

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