Recently, a significant movement of older Bitcoin holdings has been observed on the network, sparking discussions about potential selling pressure in the market.
This activity, as shown in data by the on-chain analytics platform CryptoQuant, has led to analysts advising “extreme caution” in the face of this development.
Old Bitcoin On The Move: A Signal for Caution?
A CryptoQuant analyst under the pseudonym XBTManager noted that Bitcoin’s upward trend has been accompanied by increased activity on the network, particularly from wallets that have held Bitcoin for extended periods. The question now is whether this movement will lead to a broader market reaction.
Old Bitcoins are on the move
“Overall, we are seeing a significant increase in the movement of coins from various age bands during this latest leg of the rise, with continuous transfers happening on the #Bitcoin network.” – By @XBTManager
Full post 👇https://t.co/LR0bvdvAOY pic.twitter.com/sUe6yqp4Xj
— CryptoQuant.com (@cryptoquant_com) September 24, 2024
XBTManager detailed these movements, noting several significant transfers of old Bitcoin in recent days. For example, on September 18, over 21,000 Bitcoin were moved from wallets that had held the cryptocurrency for periods ranging from one week to three years.
Similar patterns were observed on the following days, with over 29,000 BTC, held for six to twelve months, being moved on September 23 alone.
The analyst emphasized the importance of monitoring where these BTCs are headed—whether they are being transferred to exchanges, which could suggest an impending sell-off.
The increased movement of old Bitcoin raises concerns about potential selling pressure in the market. As XBTManager pointed out, the large-scale transfer of Bitcoin from wallets that have held onto the asset for months or even years could slow down Bitcoin’s current upward momentum.
“As more transfers occur on the network, Bitcoin’s upward momentum begins to slow down. Extreme caution is advised,” the analyst noted.
Potential Selling Pressure on The Horizon?
Another CryptoQuant analyst, BaroVirtual, has echoed the sentiment of caution. BaroVirtual highlighted a recent decline in institutional short positions, which may not necessarily be a positive signal for the market.
According to the analyst, while the reduction of short positions might offer some short-term relief, the analyst expressed concern over the long-term implications, noting:
I don’t quite agree that this is a positive signal if institutional investors are no longer aggressively shorting Bitcoin. Perhaps this is good for the short term so the market can take a breath. However, the build-up of short positions is needed in the long term to fuel Bitcoin’s growth.
Featured image created with DALL-E, Chart from TradingView