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An analyst suggests that one of the primary reasons behind Bitcoin’s recent downturn is movements from dormant addresses.
According to a CryptoQuant analyst, over 52,000 Bitcoins, held for less than three months, have been moved on-chain over the past three days. Additionally, 75,228 coins aged between three and six months have also been relocated.
Wallet Movements Leading to Selling
On August 29th, 23,345 Bitcoins aged 1 week to 1 month, 1,220 Bitcoins aged 6 months to 12 months, and 16,003 Bitcoins aged 5 to 7 years were transferred. These assets belong to short-term and mid-term holders. Data from CryptoQuant shows that 2,834 BTC tokens, dormant for six months to two years, started on-chain movements.
As the price continues to consolidate below the $60,000 mark, data indicates that 16,003 Bitcoins aged five to seven years have entered the market.
Market Sentiment and Price Impact
The analyst claims these movements contribute to the market-wide bearish sentiment and “need to stop.” When Bitcoins that have remained dormant for a long time are moved, it’s usually in preparation for something, and they may be used for selling.
While Bitcoin’s funding rate hints at a potential rebound for the asset’s price, the increased amount of dormant circulation could still trigger a further price drop.
Bitcoin is down by 0.2% in the past 24 hours and is trading at $59,750 at the time of writing. The asset’s market cap is currently at $1.17 trillion with a daily trading volume of $33 billion.
The BTC Relative Strength Index is still hovering at the 46 mark, indicating that Bitcoin is oversold but is approaching the neutral zone as the price roams near the $60,000 mark.
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