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One analyst has suggested that two on-chain signals could be used to predict Bitcoin falls, as they appear to have historically preceded declines in the crypto’s price.

Bitcoin sale of 7-10 year old coins has increased recently

As one analyst pointed out in a CryptoQuant PublishBTC dumping of 7-10 year old coins and the rise of ETH dominance may be two signs to look for before the coin’s value plummets.

The first relevance indicator here is the “Age brackets of production spentwhich checks the movement of the parts in chain and tells us which age groups were responsible for it.

The different “Coin Age Groups” in the market include coins based on the total time they were idle before being moved or sold.

The group referred to here is the “7 to 10 year old” cohort. The Spent Production graph for this group therefore shows the number of moved pieces that were previously idle for periods within this range. Here is the corresponding graph:

Selling Bitcoin Long Term Holders

The value of the metric seems to have spiked up in recent days | Source: CryptoQuant

As you can see in the chart, the quant marked the relevant trend points for this Bitcoin indicator along with the corresponding BTC price.

The analyst explains that whenever spending in the 7-10 year age bracket exceeds 5000, BTC generally sees a downward trend in its value.

Of the 7 times the signal has been seen in the past few years, only once has the price not registered a drop.

Ethereum dominance has also been high in recent weeks

The other indicator that the analyst deems worthy of mention is the “Dominance ETHwhich is a measure of the total percentage share of the crypto market capitalization for Ethereum.

The graph below shows the trend of this metric over the past few years.

Ethereum dominance against Bitcoin

Looks like the value of the metric has been high recently | Source: CryptoQuant

It seems that Ethereum’s dominance breaking above the 20% mark was also a bearish sign for Bitcoin during this period.

In conclusion, the analyst suggests that proper use of these two indicators together can help investors prepare for future downtrends.

At the time of writing, The price of bitcoin is floating around $18,700, down 16% in the past seven days. Over the past month, the crypto has lost 18% in value.

The chart below shows the price trend of the coin over the past five days.

Bitcoin Price Chart

BTC's value has plunged down over the last day | Source: BTCUSD on TradingView
Featured image from Bastian Riccardi on Unsplash.com, charts from TradingView.com, CryptoQuant.com



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