# Average Spent Output Lifespan (ASOL)

ASOL (Average Spent Output Lifespan) is the average age (in days) of all spent transaction outputs.

# Indicator Overview

ASOL (Average Spent Output Lifespan) is the average lifespan (in days) of all spent transaction outputs.

ASOL highlights on a macro level the lifespan of coins on a per transaction output basis that were spent that day. This provides insight into the balance between short-term (young coins) and long-term (old coins) spending behaviour over a period of time.

Generally speaking, ASOL can be considered in the following framework:

• ASOL provides a more sensitive view than MSOL on the aggregate spending behaviour. It often trends higher with market volatility and changes in market sentiment and structure as older, dormant coins are spent back into circulation.

• High values typically indicate an increased proportion of network traffic are old coins being spent, often associated with long term holders taking advantage of high market volatility.

• Low values typically indicate day-to-day traffic comprised mainly of young coins being spent, often associated with traders and short term holders.

Note that ASOL account only for the lifespan of the spent outputs and does not consider coin volume moved (i.e. ignores how many BTC units are moved). Two outputs which are 100-days old but worth 0.1BTC and 100BTC respectively, have identical weights in the ASOL calculation.

# How is it measured?

ASOL (Average Spent Output Lifespan) is defined as the mean age (in days) of all spent transaction outputs in a given time period.

$\textrm{ASOL} = \textrm{Mean}\big\{ \textrm{lifespan}~{\color{gray}{\textrm{[days]}}} ~{\color{gray}{\textrm{(of all spent outputs)}}} \big\}$

In order to account for change and eliminate obvious relay transactions, outputs with a lifespan of less than 1 hour are discarded.

# User Guide

ASOL is an indicator best applied to gauge changes in older coin spending behaviour from day-to-day baseline traffic. It observes the global state of spending behaviour and is sensitive to older spent outputs 'bringing up the average'. A few very old outputs, 5yrs+ for example, could lift the average spent output lifespan by a non-trivial amount and thus register as an elevated ASOL signal.

• High indicator values occur when a large proportion of old coins are on the move, potentially realising profits, taking advantage of market strength, or have reduced conviction to hold the asset.

• Low indicator values occur when day-to-day, young coins dominate network traffic, older transaction outputs remain dormant, and conviction to continue holding the asset is high.

## Example Application

ASOL values less than 40 days are typical of a day-to-day baseline traffic. Where ASOL values trend higher and peak above 40 days, it often correlates to local market tops or bottoms. ASOL values greater than 60 days are uncommon and tend to only occur during periods of high volatility as older coins realise profits or losses.

ASOL values can be noisy day-to-day and thus benefits from application of moving averages, with 7-day and 30-day periods recommended.

Note also how the lower bound values of the ASOL indicator gradually increases over time. This phenomena is simply a result of there being more aggregate lifespan accumulated by the UTXO set as Bitcoin protocol continues operation.

• Scale: linear or log

• Moving Averages: 7-day and/or 30-day