Bitcoin is on the brink of re-emerging above $30,000 for the first time since June 2022. As excitement abounds, how are indicators looking for the asset both on and off chain?Crypto market intelligence platform Santiment recently analyzed some observable impacts and triggers of Bitcoin’s latest price moves, noting rising social volume and dominance compared to other cryptos.
Bitcoin’s Dominance Returns
Per a blog post from Santiment on Thursday, Bitcoin’s Social Volume and Social Dominance have now reached their highest levels in an entire year.
Social Dominance refers to the share of discussions in crypto media referring to Bitcoin. Meanwhile, Social Volume measures the number of text documents mentioning the assets, including telegram messages and Reddit posts, among other things.
Both metrics appeared to rise precisely as Bitcoin skyrocketed back above $25,000 earlier this month when the Federal Reserve agreed to bail out all depositors to Silicon Valley Bank (SVB). Market excitement is also back on the rise, with Crypto’s fear and greed index reaching a “greed” score of 63 as of Friday.
Santiment cautioned against overexcitement, however, noting that such fervor “usually indicates a local top.” It also called attention to Bitcoin’s trading volume which, while strong during its recent runup to $27,000, has now drawn back down in a divergence from its price.
“Now we are observing a divergence in Price and Volume, which usually isn’t a good thing as it is signaling that there’s exhaustion in the price action,” wrote Santiment.
Old Coins On the Move
The firm also found that there have been spikes in movement among “dormant coins” – Bitcoin transaction outputs that haven’t moved in the last 5 years – since mid-March. Each spike was involved between 2800 and 3000 BTC, which Santiment believes could show that a certain whale is “jittery” about recent price action.
The US government filed a memo on Friday claiming it had sold over $200 million worth of its Silk Road Bitcoin holdings on March 14. Santiment also posed that movements could be related to the CFTC’s recent lawsuit against Binance, or other crypto-related crackdowns.
The firm’s MVRV-Long/Short Difference metric shows that long-term holders are starting to show greater unrealized profits than short-term holders at current price levels. This reversal indicates a similar pattern to 2019.
“If history is to repeat itself, then, we might just see a sharp spike marking a local top and a dreadful bleedout like 2019,” wrote the firm.
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