Bitcoin Bearish Signal: Dormant Supply On The Move Again
On-chain data shows some dormant Bitcoin supply is again moving into exchanges, something that could be bearish for the price of the crypto.
Bitcoin Exchange Inflow For Old Coins Has Observed Spikes In Recent Days
As pointed out by an analyst in a CryptoQuant post, some coins in the age ranges 2y-3y and 3y-5y have recently been deposited to exchanges.
The “exchange inflow” is an indicator that measures the total amount of Bitcoin being transferred into the wallets of all centralized exchanges.
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A modified version of this indicator is the exchange inflow “Spent Output Age Bands” (SOAB), which tells us about the individual contribution to the total inflows from the different supply groups in the market.
These cohorts are categorized based on the amount of time their coins have been sitting still for. The relevant age bands here are “2y-3y” and “3y-5y”; the below chart shows the trend in the exchange inflows coming from these supplies:
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As you can see in the above graph, the Bitcoin exchange inflow SOAB has spiked up for these coin groups during the last couple of days or so.
This means that some investors have been depositing sizeable amounts of coins aged between 2 to 3 years and those between 3 to 5 years.
Such old supply is called the “long-term holder” supply. In general, the older the coins are, the less probable they are to move at any point.
So, any movement from these coins, especially those to exchanges, may have noticeable implications on the price of Bitcoin.
BTC Price
At the time of writing, Bitcoin’s price floats around $19.1k, up 1% in the last seven days. Over the past month, the crypto has lost 1% in value.
The below chart shows the trend in the price of the coin over the last five days.
Bitcoin has continued to show stale price movement in the past week as the crypto has been mostly sticking around the $19k level. Two days or so ago BTC did make an attempt to break the monotony by plunging below to $18.7k, but it wasn’t long before the coin was back at $19k.
Featured image from Max Saeling on Unsplash.com, charts from TradingView.com, CryptoQuant.com