A new experimental metric is featured in the latest cryptocurrency news, indicating that the Bitcoin 2019 price run was triggered by real and confirmed transaction growth. The quality of activity, as the metric shows, allowed Bitcoin to clock a 28-week high last Saturday, signaling that the cryptocurrency’s latest price rally may be more fundamentally driven compared to what many expect.
Named the Transaction Amount to Active Addresses Ratio (TAAR), the metric was first proposed by the Pugilist Ventures Founder Chris Brookins, who divided the 24-hour adjusted transaction volume (USD) of Bitcoin with the number of its active addresses, identifying how much each of the active addresses spends in transactions per day, on average. Brookins found that the Bitcoin 2019 price run was signaled from this ratio.
For those of you who don’t know or are unfamiliar with the TAAR ratio which is a viral topic on many best cryptocurrency news sites…
If the TAAR is high, it means that each user (active address) is transacting in high notional values. In other words, TAAR was high over the past couple of weeks during the Bitcoin 2019 price run which showed that the network “quantity” (how much is being spent i.e. transaction volume) was high per the “quality” (how many users are spending the funds from active addresses).
So, the TAAR’s quantity and quality matched and were both high. This is how a positive reaction in Bitcoin’s market occurred. Since April of 2013, the oldest data point (as we can see from Coinmetrics) has been this one – making it clear that the Bitcoin 2019 price run entered a sustainable trend when it was accompanied by a TAAR trend in the same direction.
As the chart associated with TAAR indicate, the Bitcoin 2019 price run was impressive. When seeing the network activity, Bitcoin managed to escape its bear market in 2015 with the same technical traction.
However, weeks ago, this added fundamental validation to the Bitcoin price growth at the time, which is often a victim to pure speculation. And what’s most interesting is the fact that the Bitcoin TAAR performance is once again rising, indicating that the bear market may be over soon and that corrections in price should be expected – both in the Bitcoin as well as the coming altcoin news.
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