Author: Tom Mitchelhill, CoinTelegraph; Translated by: Wuzhu, Jinse Finance
A recent $1.7 billion transfer of “dormant” Bitcoin could lead to increased selling pressure in the cryptocurrency market, an on-chain Bitcoin analyst has said.
In an article published to CryptoQuant on August 13, anonymous trader XBTManager wrote that a total of 29,206 Bitcoins were moved to the chain between August 11 and August 12, which had been idle for up to three years.
29,206 dormant BTC were moved between August 11 and August 12. Source: CryptoQuant
XBT said that on August 11, 18,536 BTC that had been idle for 2-3 years were transferred, which put significant pressure on the price of Bitcoin. A few hours later, another 5,684 BTC that had been idle for 3-6 months were also transferred.
On August 12, 4,986 BTC that had been idle for 3-12 months and 2,394 BTC that had been idle for 3-5 years were moved to the chain.
“When these long-idle Bitcoins are moved, it often leads to increased selling pressure in the market. In times of low liquidity, this can put downward pressure on prices, which may continue.”
In an Aug. 14 investment note seen by Cointelegraph, IG market analyst Tony Sycamore took a more bullish view on Bitcoin’s medium-term trajectory, noting that the macro environment is strengthening following last week’s $500 billion cryptocurrency market sell-off.
Sycamore said Bitcoin was “boosted by continued improvement in risk sentiment and a sell-off in U.S. yields” following weaker-than-expected U.S. PPI data.
“After last week’s false breakout above $50,000, positions have clearly decreased and we expect Bitcoin to extend its gains in the coming sessions towards the trend channel resistance around $70,000.”
In an August 13 market report, Glassnode analysts said the current market is characterized by “clear uncertainty.” However, they noted that market participants are beginning to show a preference for HODLing.
For details, please refer to Jinse Finance article "Glassnode: Who is buying cryptocurrencies in the current market situation?"
Analysts say the cryptocurrency market faces a period of widespread “supply distribution” — a technical way of saying funds are being moved around en masse — following bitcoin’s all-time high in March.
"Over the past few weeks, this trend has shown early signs of reversing, especially for the largest wallets typically associated with ETFs. These large wallets appear to be returning to accumulation mode," the analysts wrote.
Large wallets are starting to hoard Bitcoin again. Source: Glassnode
The analysts concluded that overall, current on-chain conditions indicate an “undertone of high conviction” among the community of Bitcoin holders.
