Bitcoin Faces Potential Sell Pressure as $1.7B in Dormant BTC Moves Over 2 Days

Over $1.7 billion in long-dormant Bitcoin moved on-chain, potentially signaling increased sell pressure. Analysts note mixed market sentiments, with some predicting downward trends while others foresee gains amid improving macro conditions.

A significant shift in dormant Bitcoin (BTC) holdings has caught the attention of crypto market analysts, with over $1.7 billion worth of Bitcoin moving on-chain in just two days. According to a report by pseudonymous trader XBTManager on CryptoQuant, a total of 29,206 BTC that had remained inactive for up to three years was transferred between August 11 and August 12.

The movement included 18,536 BTC that had been dormant for 2-3 years, which reportedly caused noticeable pressure on Bitcoin’s price. Additionally, another 5,684 BTC that had been inactive for 3-6 months were moved a few hours later. On August 12, 4,986 BTC that had been dormant for 3-12 months and 2,394 BTC inactive for 3-5 years were also transferred on-chain.

XBTManager noted that such movements of long-dormant Bitcoin often lead to increased selling pressure in the market. This is especially true in periods of low liquidity, where these transfers could create downward pressure on prices.

However, not all analysts are predicting a bearish outcome. In an August 14 investment note reviewed by Cointelegraph, IG markets analyst Tony Sycamore expressed a more bullish perspective. He pointed to strengthening macro conditions, such as a sell-off in U.S. yields and a positive risk sentiment following cooler-than-expected U.S. Producer Price Index (PPI) data, as reasons for potential mid-term gains in Bitcoin. Sycamore believes that Bitcoin, after positioning significantly cleaner following last week’s market shake-up, could extend its gains toward $70,000 in the sessions ahead.

Glassnode analysts, in their August 13 market report, described the current market as being in a “discernible level of uncertainty.” Despite this, they noted a growing trend of HODLing among Bitcoin holders, suggesting that market participants are beginning to accumulate rather than distribute their assets.

The analysts concluded that while the market is characterized by uncertainty, there is an “undertone of high conviction” among Bitcoin holders, with large wallet sizes often associated with ETFs returning to a regime of accumulation. This could indicate a bullish outlook in the longer term, despite the recent movements of dormant BTC.

Tag:

Bitcoin Sell Pressure, Dormant BTC Movement

AI Prompt for Illustration:

Create an image that depicts a large amount of Bitcoin being transferred on a digital network, with symbols of uncertainty like fluctuating graphs in the background. Include elements that represent market dynamics, such as bears and bulls, to emphasize the mixed market sentiments.