Although an all-encompassing bullish rally can still be seen on the King Coin’s one-day price chart, Bitcoin faced a major consolidation at the $ 47,250 level. The same raised investor concerns about the rally.
At this point, however, the good news is that Bitcoin is still bouncing back. But in order for the price of BTC to continue on this bullish path, it is imperative to evaluate the circulating supply metrics to understand future market flow.
Bitcoin managed to climb to the $ 30,000 level above the $ 47,000 level after a brief detour less than a month ago. Now that the biggest coin on the weekly chart is set to close in the green for four straight weeks, speculation is running high. Here, a look at this resuscitation rally through the lens of certain metrics can give a clearer picture of the forward trend.
The price movement is still bullish
Bitcoin closed green on the daily chart for the past four days, trading at $ 47.2,000 at press time. However, after the price of BTC rejected the resistance at USD 48,000 on August 14, optimism about exceeding the king’s coin level appeared to be fading. Nevertheless, BTC has managed to assert itself. Indeed, how highlighted from Rekt Capital, Bitcoin managed to successfully test the tip of the ascending triangle two days in a row as a support.
However, the price of Bitcoin on the one-day chart appeared to be forming a rising wedge pattern, indicating a weakening upside momentum. This was a sign of a bullish to bearish trend change, but the fact that BTC found solid support in an ascending triangle said otherwise. Amid more bullish than bearish signals, the coin price development looked largely neutral and leaned a little towards the bullish side.
These metrics must match
Bitcoin’s average spent output lifespan (ASOL) and median spent output lifespan (MSOL) showed a massive divergence. Notably, ASOL (30 days), which in simple terms is the average age of transaction spend spent, highlighted an upward trend.
ASOL levels were at an all-time high at the time of writing, last seen in February. On the contrary, MSOL has seen a downtrend, last hitting an all-time low in March.
The ASOL metric can be extremely important in identifying old coins that were previously created and whether they are moving around the network. An increase in the metric meant old coins were in motion as it increases the average. Additionally, MSOL tracks middle-aged or supply (daily traffic) coins that have been lowest for BTC since March.
ASOL’s rise has shown that ancient coins are currently dominating the flow and movement. Historically, the dominance of the old coins has been a good signal for a strong rally, but a similar divergence of ASOL and MSOL in the past has been a bearish signal.
However, since the larger trend is currently bullish, the rise in the ASOL value on the chart could indicate that the asset is facing an even stronger bullish trend. The lower MSOL had to level up a bit with MSOL for the rally to continue, and its slight increase at press time was a sigh of relief.