Cointime

Download App
iOS & Android

Bitcoin Bearish Signal: Large Dormant Supply On The Move

On-chain data shows a large amount of old Bitcoin supply has moved in the last few days, something that could be bearish for the crypto’s price.

Bitcoin Supply Older Than 2 Years Showed Movement In The Past Week

As pointed out by an analyst in a CryptoQuant post, a total of four large transfers with old supply have taken place in the last week. The relevant indicator here is the “Spent Output Age Bands” (SOAB), which tells us the total number of coins that each age band is moving on the chain right now.

The age bands refer to supply groups divided based on the criteria of the age of the coins (or more precisely, of the UTXOs). For example, the 1m-3m age band includes all coins that have been sitting dormant inside the same addresses since at least 1 month ago and at most 3 months ago. The SOAB metric for this group would then measure the total number of these coins that have been transferred to another wallet.

Now, the age bands of interest here are the 2y-3y and 3y-5y groups. Typically, investors that have been holding their coins since more than 155 days ago are said to be the “long-term holders” (LTHs), so both these bands include coins belonging to two different segments of the LTHs.

Also, it’s a statistical fact that the longer investors hold onto their BTC, the less probable they become to sell at any point. This implies that the holders with such aged supply as in these bands would be some of the most resolute HODLers in the market.

Here is a chart that shows the SOAB data for these two Bitcoin age bands over the past week:

As the above graph displays, there have been four large movements of coins belonging to these cohorts in the last few days. Three of these transfers were from the 2y-3y age band, while one was from the 3y-5y group.

The spike from the latter cohort was significantly larger than the others, amounting to more than 15,000 BTC being moved. All the transfers from the 2y-3y age band combined came to almost 13,000 BTC, which is still less than the 3y-5y group’s transactions.

Generally, large movements of such old Bitcoin supply is a sign of dumping from the LTHs, and if it’s the case here as well, then it would mean that the current market broke these so-called diamond hands into selling.

The quant notes that these transfers were at least not headed towards exchanges, which does reduce the probability of these transactions being for selling purposes (but obviously doesn’t eliminate the chances, as these investors could just have been selling through OTC deals).

Regardless of that, however, the analyst cautions, “it is very surprising to see FOUR of these transactions in one week. It is definitely worth watching in the next period.”

BTC Price

At the time of writing, Bitcoin is trading around $16,700, up 1% in the last week.

Comments

All Comments

Recommended for you

  • US Spot Ethereum ETF Sees Net Inflow of $9.61 Million Yesterday

    On June 17, according to monitoring by Trader T, the US spot Ethereum ETF experienced a net inflow of $9.61 million yesterday.

  • US Spot Bitcoin ETF Sees Net Inflow of $10.04 Million Yesterday

    On June 17, according to monitoring by Trader T, the US spot Bitcoin ETF experienced a net inflow of $10.04 million yesterday.

  • BTC Surpasses $66,000

    Market data shows that BTC has surpassed $66,000, currently priced at $66,021.58, with a 24-hour decline of 0.05%. The market is experiencing significant volatility, so please ensure proper risk management.

  • ETH Surpasses $1800

    Market data shows that ETH has surpassed $1800, currently priced at $1800.27, with a 24-hour increase of 0.83%. The market is experiencing significant volatility, so please ensure proper risk management.

  • a16zcrypto Policy Chief Criticizes Illinois Cryptocurrency Tax Law: Tax Logic is Absurd and Violates Multiple Federal Laws

    On June 17, Miles Jennings, the policy chief of a16zcrypto, stated that the digital asset tax law signed by the Governor of Illinois is one of the most restrictive regulations on cryptocurrency in the United States. The law imposes taxes on the exchange, transfer, and custody of digital assets: buying Bitcoin incurs a tax; storing Bitcoin on Coinbase also incurs a tax, and so on. Across the United States, there are virtually no similar financial transaction taxes on stocks, bonds, or derivatives. This means that cryptocurrencies are being treated differently, which violates multiple federal laws. Furthermore, the logic behind this taxation is nonsensical: transactions involving paper certificates of stocks, bonds, and derivatives are not taxed, yet transactions recorded on a blockchain are taxed simply because of their format? This is akin to taxing emails. Illinois could have embraced blockchain innovation and enjoyed the cost advantages it brings to the general public; however, the state is instead preparing to penalize local entrepreneurs and ordinary residents who use cryptocurrency. It is truly regrettable. Just recently, Illinois introduced a reasonably scoped Digital Assets and Consumer Protection Act, demonstrating a positive and inclusive attitude towards blockchain technology. Yet, with this new tax policy, the attitude has taken a complete 180-degree turn. If states implement such discriminatory taxes that target only a single asset class, industry developers and ordinary users will migrate to other regions, ultimately resulting in losses for everyone.

  • BTC Falls Below $66,000

    Market data shows that BTC has fallen below $66,000, currently priced at $65,977.25, with a 24-hour decline of 1.34%. The market is experiencing significant volatility, so please ensure proper risk management.

  • ETH Falls Below $1800

    Market data shows that ETH has fallen below $1800, currently priced at $1799.84, with a 24-hour decline of 1%. The market is experiencing significant volatility, so please ensure proper risk management.

  • CLARITY Act Proposes $150 Million Funding to Combat Digital Asset Crimes

    On June 16, U.S. Senator Cynthia Lummis posted on the X platform, stating that the CLARITY Act will allocate $150 million to support law enforcement in tracking down fraudsters and other criminals in the digital asset space, enhancing efforts to combat cryptocurrency-related criminal activities.

  • Trump: Strait of Hormuz Will Fully Resume Navigation by Friday

    Trump: The Strait of Hormuz will fully resume navigation by Friday.

  • SK Hynix Responds to Rumors of 100 Trillion Won Shareholder Return Plan

    On June 16, SK Hynix addressed market rumors regarding a proposed 100 trillion won shareholder return policy, stating that the reported figure is inaccurate. The company indicated that it is exploring various options to enhance shareholder value, but has never discussed the specific scale of shareholder returns mentioned in the reports.