As all cryptocurrency markets show signs of recovery, it will be interesting to see if the momentum lasts. Several Bitcoin metrics confirm there may be something larger brewing. A low Stock-to-Flow Deflection and high mean transaction volume can create a powerful combination. 

Bitcoin Mean Transaction volume Keeps Surging

Whenever a network notes a higher mean transaction volume, it is often considered a healthy sign. More volume means users are submitting higher-value transactions regularly. For Bitcoin, the world’s leading cryptocurrency, maintaining a higher value would almost be taken for granted. However, that is not always the case for the mean transaction volume. 

Per Glassnode, the MTV has now hit a three-year high. That is remarkable for many reasons. The previous high for mean transaction volume dates back to early December 2018. Ever since, the volume has decreased significantly and even went below 2 BTC for several months. Things have been picking up again in early 2021, which isn’t entirely surprising given the price momentum. 

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BlocDesk Bitcoin MTV
Source: Glassnode

Today, that value has surged to 5.480 BTC. Several reasons can contribute to this trend. There is a higher Bitcoin price value compared to December 2018, which will make people more eager to spend BTC. Additionally, there is growing institutional interest in Bitcoin. Multiple companies have a public Bitcoin Treasury, representing vast sums of cryptocurrency. 

Coinciding with this higher mean transaction volume is a five-year low for Bitcoin’s stock-to-flow deflection. Glassnode indicates a value for this metric below one means Bitcoin is undervalued. Currently, the value sits at 0.385, hinting at a potential Bitcoin bull run that may loom on the horizon. Hitting a five-year low while the BTC value sits above $35,000 is an intriguing development. 

Short-term Supply Goes Dormant Again

Other Bitcoin metrics appear to work in favor of the world’s leading cryptocurrency as well. The amount of supply last active 3m-6m ago is showing signs of dormancy again. That situation was very different just a few weeks ago when people seemed to be spending Bitcoin as soon as it hit their wallet.

BlocDesk BTC Supply 3 to 6m
Source: Glassnode

The interpretation of this metric can differ from one person to the next. This metric is a positive development at its core, as it shows people are less eager to move coins last received in the past three to six months. A two-year high for the metric is a bullish sign in that regard, assuming things will remain this way.

At the same time, there may be a bearish angle to this development as well. As more Bitcoin goes “dormant”, there is always a bigger chance of that supply making its way to exchanges and trading platforms all at once. There will always be uncertainties when it comes to Bitcoin and other cryptocurrencies. For now, everything – even the mean transaction volume – looks relatively bullish, although the momentum can turn around on a dime.