Bullet Points:
– On-chain data shows a significant amount of old Bitcoin supply has flowed into Binance today, potentially bearish for the crypto’s price.
– The relevant indicator here is the “Spent Output Age Bands” (SOAB), which measures the total amount of Bitcoin that each age band in the market is moving currently.
– The 1m-3m and the 3m-6m age bands are the relevant cohorts for the current discussion, and their SOAB values have been quite high today.
Recently, on-chain data has revealed that a significant amount of old Bitcoin supply has flowed into Binance today, something that could potentially be bearish for the crypto’s price. The relevant indicator here is the “Spent Output Age Bands” (SOAB), which measures the total amount of Bitcoin that each age band in the market is moving currently.
The “age bands” here refer to coin groups divided based on the age of the coins belonging to them. For example, the 6m-12m age band includes the total number of coins that have been sitting dormant on the blockchain since at least 6 months and at most 12 months ago. The SOAB metric for this age band would then tell us how many of these coins from this age band are being transferred right now.
A modified version of this indicator is the “exchange inflow SOAB,” which only tracks transactions that are going toward exchanges. Investors usually deposit to these platforms for selling purposes, so large values of this metric can have a bearish impact on the price.
In the context of the current discussion, the 1m-3m and the 3m-6m age bands are the relevant cohorts. An analyst from CryptoQuant recently pointed out that this aged supply is likely to be in profits and hence the deposits could have been done to sell it.
A chart of the trend in the SOAB data for these two age bands over the past day shows that the value of the metric seems to have been quite high today. This suggests that a significant amount of old Bitcoin supply has been deposited to Binance today, which could potentially impact the crypto’s price negatively.
It is important to note that this analysis is based on on-chain data, which is not always a reliable indicator of market movements. Therefore, investors should also consider other factors before making any decisions.