Dormant Bitcoin Transfers Create Market Pressure

Bitcoin Faces Pressure from Dormant Transfers; What’s Next?

The movement of over $1.7 billion in dormant Bitcoin could direct to increased selling pressure in the crypto market. The transfer of 29,206 Bitcoin, which had been inactive for up to three years, occurred between August 11 and 12, creating noticeable pressure on the price of Bitcoin. 

XBTManager revealed that on August 11, 18,536 BTC which was inactive for 2 to 3 years, and 5,684 BTC inactive for 3-6 months were transferred. On the other hand on August 12,  4,986 BTC inactive for 3-12 months and 2,394 BTC inactive for 3-5 years were transfered. Moreover, these transfers created selling pressure on the on the price of Bitcoin.

Glassnode analysts mentioned a discernible level of uncertainty in the current market but noted a preference for holding emerging among market participants. They also observed a reversal in the trend of extensive supply distribution, particularly for the largest wallet sizes associated with ETFs, indicating a return to accumulation. Overall, on-chain conditions suggest an undertone of high conviction among the Bitcoin holder base.

Bitcoin Is Facing Rejection From 200 SMA; What Next?

On the technical chart, Bitcoin price was facing multiple resistance from the 200 SMA recently. However, after experiencing a major sell-off, it was able to bounce back, which may suggest a change in bullish trend as it grew by almost 8.60% this week.

The chart unveils a clear downtrend over the past month, with BTC breaking below crucial support levels and testing the level around 50,000. However, the recent bounce indicates a potential shift in momentum.

At the time of writing BTC was trading at $60,755 with a 0.22% intraday rise. Currently, it has a market cap of 1.20 Trillion with a 24-hour trading volume of 29.18 Billion. 

Bitcoin's price analysis is currently giving a neutral outlook on the technical chart. The key indicator RSI is also in the neutral zone near the median line at 48.64. If the price breaks above the 200 SMA line and sustains over there it may start a bullish rally.  

Conclusion

The recent transfer of over $1.7 billion in dormant Bitcoin has created noticeable selling pressure in the market. Despite this, there is a growing preference for holding among market participants, indicating high conviction in Bitcoin's long-term value. On the technical front, Bitcoin has faced resistance from the 200 SMA but has shown signs of a potential bullish shift after a significant bounce. Currently trading at $60,755, Bitcoin's price analysis remains neutral, with the RSI near the median line. A sustained break above the 200 SMA could signal the start of a bullish rally.

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Also Read: Norwegian Wealth Fund Boosts Bitcoin Holdings to 2,446 BTC