Cryptocurrency analytics firm Santiment has released its latest market assessment in a video featuring the company’s founder, Maksim Balashevich.
Maksim Balashevich emphasized the importance of analyzing the average dollar investment age (MDIA) to evaluate the market’s health. This metric represents the average age of coins in a wallet and can indicate whether assets are actively traded or held:
A decrease in MDIA suggests that younger coins are circulating in the market, indicating active participation and optimism.
On the other hand, an increase in MDIA could indicate accumulation, which could lead to a market downturn if not accompanied by new buying pressure.
“Observing a decline in the average invested dollar age is a positive sign. It confirms the upward price movements and indicates that the assets are entering a healthy cycle,” stated Maksim Balashevich.
Analysts suggest that recent market conditions show signs of accumulation, with investors remaining confident despite price corrections. Maksim Balashevich cautioned that this could signal a long-term uptrend but could also precede short-term fluctuations.
In addition, Santiment analysts examined the historical pattern of market activity during the final months of the year. Previous years, such as 2017 and 2021, experienced significant swings in December and major corrections after reaching all-time highs.
“This year has been a significant tax year for many institutional and individual investors who profited from crypto and stocks,” noted Maksim Balashevich, indicating that year-end profit-taking for tax purposes could result in further price declines, even if the long-term fundamentals remain strong.
Despite the short-term turbulence, Santiment analysts maintain optimism for 2025. They anticipate more favorable market conditions in the early part of the year as the industry matures and adjusts to macroeconomic factors.
*This is not investment advice.