Cryptocurrency analytics firm Santiment shared its market assessment in a video featuring its founder Maksim Balashevich.
Maksim Balashevich highlighted the importance of examining the average dollar investment age (MDIA) to analyze the health of the market. This metric reflects the average age of coins in a wallet, indicating whether the assets are actively traded or held:
The decline of MDIA indicates that newer coins are circulating in the market and that active participation and optimism are increasing.
On the other hand, an increase in MDIA indicates that accumulation is occurring without new buying pressure, which may lead to stagnation in the market.
“It is a positive sign to see that the average age of the dollar invested is decreasing. This confirms the upward price movements and shows that the assets are entering a healthy cycle,” Balashevich explained.
Analysts say that current market conditions are showing accumulation signals, indicating that investors still have confidence in the market despite price corrections. Maksim Balashevich emphasized that this could indicate a long-term rise, but it could also be a harbinger of short-term fluctuations. "When you see accumulation and the price starts to rise slightly after a decline, this usually indicates strong confidence among investors. However, if there is excessive optimism without sufficient buying pressure, this can create fragility," he said.
Santiment analysts also examined historical trends in market activity in the final months of the year. In particular, years such as 2017 and 2021 saw significant swings in December and major corrections following all-time highs.
“This year has been a significant tax year for many institutional and individual investors who have profited from crypto and stocks,” said Maksim Balashevich, noting that while long-term fundamentals remain strong, year-end tax profit-taking could lead to further price declines.
Despite the short-term turmoil, Santiment analysts are optimistic about 2025. They predict that more stable market conditions will prevail in early 2025 as the industry matures and macroeconomic factors adapt.