Cryptocurrency analytics firm Santiment has presented its latest market assessment in a video featuring the company's founder, Maksim Balashevich.
Maksim Balashevich noted that to gauge the health of the market, it is important to analyze the average dollar investment age (MDIA). This metric reflects the average age of coins in a wallet and can indicate whether assets are actively traded or held:
- A decline in MDIA indicates that younger coins are circulating in the market, indicating active participation and optimism.
- Conversely, a rising MDIA could indicate accumulation that could lead to a recession in the market if not accompanied by new buying pressure.
“Seeing that the average invested dollar age is falling is a positive sign. It confirms the upward price movements and shows that the assets are entering a healthy cycle,” said Maksim Balashevich.
Analysts say that recent market conditions show signs of accumulation, with investors remaining confident in the market despite price corrections. Maksim Balashevich warned that this could signal a long-term uptrend, but could also be a precursor to short-term fluctuations.
“When you see accumulation and the price starts to rise slightly after a decline, it usually indicates strong belief among investors. However, this can lead to vulnerability if there is excessive optimism without sufficient buying pressure,” he said.
Santiment analysts also looked at the historical course of market activity in the final months of the year. In previous years, including 2017 and 2021, there were significant swings in December and major corrections after all-time highs.
“This year has been a big tax year for many institutional and individual investors who profited from crypto and stocks,” said Maksim Balashevich, suggesting that even if long-term fundamentals remain strong, year-end profit-taking for tax purposes could lead to further price declines.
Despite the short-term turmoil, Santiment analysts remain optimistic about 2025. They predict softer market conditions in early 2025 as the industry matures and adapts to macroeconomic factors.
*This is not investment advice.
