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 reflects 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 suggest accumulation, which could lead to a market recession if not accompanied by new buying pressure.
“It is a positive sign to see the average invested dollar age falling. It confirms the upward price movements and indicates that the assets are entering a healthy cycle,” stated Maksim Balashevich.
Analysts believe that recent market conditions indicate accumulation, as investors remain confident despite price corrections. However, Maksim Balashevich cautioned that this could signal a long-term uptrend or serve as a precursor to short-term fluctuations.
“When you observe accumulation and a slight price increase after a decline, it usually signifies strong belief among investors. However, excessive optimism without sufficient buying pressure can lead to vulnerability,” he explained.
Santiment analysts also examined the historical pattern of market activity in the final months of the year. Previous years, such as 2017 and 2021, witnessed significant swings in December and major corrections after reaching all-time highs.
“This year has been significant in terms of taxes for many institutional and individual investors who earned profits from cryptocurrencies and stocks,” suggested Maksim Balashevich. He further noted that year-end profit-taking for tax purposes could potentially result in further price declines, even if the long-term fundamentals remain strong.
Despite the short-term turmoil, Santiment analysts maintain an optimistic outlook for 2025. They predict more favorable market conditions in the early part of the year as the industry matures and adapts to macroeconomic factors.
*This is not investment advice.
