Bitcoin Bearish Signal: Dormant Supply On The Move Again
October 23 2022 - 2:00PM
NEWSBTC
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. When the value of this
metric is high, it means investors are depositing large amounts to
exchanges right now. Such a trend, when prolonged, can prove to be
bearish for the value of the crypto as it can be a sign of dumping
from holders. 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. Related Reading: Data: Bitcoin Whales
Who Accumulated At $18k Have Continued To Hold Strong 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: Looks like the value of the metric for
these cohorts has been raised in recent days | Source: CryptoQuant
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. Related Reading: This On-Chain Metric Suggests Bitcoin Not
In Danger Of Another Sharp Drawdown 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. The value of the crypto seems to have rebounded
back from the dip a couple of days ago | Source: BTCUSD on
TradingView 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
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