Bitcoin Soars to New Heights as Bull Market Powers On

A key technical indicator known as liveliness is gaining momentum, signaling potential bullish activity in Bitcoin’s market cycle. Despite modest price movements recently, analysts observe that the liveliness metric — which measures the relative activity of long-term and recently transacted coins — has reached new heights. This metric typically rises during bull runs when coins change hands at higher prices, reflecting inflows of new capital into the market.

Technical analyst “TXMC” explained that liveliness acts like a long-term moving average of on-chain activity, aggregating all lifetime spending compared to holding activity on-chain. It increases when more coins are actively moving, indicating growing demand and investment interest. “Liveliness usually rises in bull markets as supply changes hands at higher prices, signaling a flow of new investments,” the analyst noted.

Fellow analyst James Check highlighted that liveliness has remained range-bound since the 2017 peak but has now broken out decisively, marking a significant shift. The current peaks in liveliness are notably larger than those seen during the last cycle, reflecting an unprecedented level of dormant coin reactivation across the network. This surge involves transactions worth billions of dollars, a stark contrast to the hundreds or thousands of dollars transacted during previous cycles.

Liveliness Surge Indicates Strong Market Participation

Check described this increase as part of one of the greatest capital rotations in Bitcoin history. The destruction of coin days—an indicator of coins being moved after long periods of inactivity—has also surged, suggesting large-scale shifts of market dominance and a reallocation of capital flowing into Bitcoin.

Price Stabilization and Future Outlook

Bitcoin’s price has been consolidating around $89,000, with brief dips below this level. Market analysts like Michaël van de Poppe suggest that prices in the range of $86,000 to $92,000 are mostly noise, but a breakout above $92,000 could accelerate gains. Conversely, failure to break resistance might lead to a double-bottom pattern in the low $80,000s, potentially setting the stage for a strong rally heading into the new year.

Overall, the technical signals and on-chain metrics imply the potential for a bullish continuation, with some experts predicting a significant rally in early 2023 if current trends persist.