Bitcoin price still hasn’t taken a clear direction. The cloudy period has caused all types of indicators to fall to record lows.
One of these indicators is the Speed, which is currently at a 3-year low. According to CryptoQuant on-chain analyst Ki Young Ju, this development can be explained in both positive and negative ways.
Bitcoin “speed” at all-time low
Velocity means speed in English. The indicator is used for money (and crypto) to show how fast money moves between people.
“The velocity of money is a measure of the speed at which money is exchanged in an economy. It’s the frequency with which money is transferred from one company to another.” – Investopedia.
A tweet by Ki Young Ju shows that the speed at which bitcoins are being moved is at its lowest in three years.
#Bitcoin The rate is at a 3 year low.
There are two sides to this situation. It can be viewed as positive as whales are sticking with it, or negative as it is not carried over to new investors. pic.twitter.com/KwNVVXslW8
— Ki Young Ju (@ki_young_ju) August 25, 2023
The analyst notes that both a positive and a negative explanation are possible:
“It can be viewed as positive as whales continue to hold. Or it can be viewed as negative because no bitcoin is passed on to new investors.”
The decline in the speed at which bitcoins are being moved fits into the larger picture, where the price is mostly trending sideways.
Uncertainty among bitcoin investors
Above all, it seems to be the general uncertainty that makes Bitcoin investors suspicious. Last Friday, for example, it became known that the US Federal Reserve was still considering raising interest rates.
Higher interest rates often have a negative impact on risky assets, which Bitcoin is one of. But even here there is still some uncertainty, which is reflected in the reaction of prices to last Friday’s important speech.
JPMorgan, the world’s largest bank, recently said that a deeper crypto market crash is unlikely. Among other things, it mentions the upcoming Bitcoin halving. The Bitcoin supply halving could result in more scarcity, which could have a positive impact on the price.