On-chain data shows a large amount of Bitcoin older than 10 years has suddenly moved today, a sign that could be bearish for the price.
Bitcoin Dormant From More Than 10 Years Ago Has Abruptly Moved
As pointed out by an analyst in a CryptoQuant post, this movement of dormant coins may be a sign of selling. The relevant indicator here is the “Spent Output Age Bands” (SOAB), which tracks the movements that the different age bands are making on the blockchain right now.
The “age bands” here refer to groups of coins divided based on the total amount of time that they have been sitting still on the network for. In the context of the current discussion, the 10+ years age band is of interest, which is a cohort that includes all coins that haven’t moved from a single address in more than 10 years.
The SOAB metric, when applied for this particular age band, would naturally tell us about the number of coins that investors belonging to this group are transferring at the moment.
Now, here is a chart that shows the trend in the Bitcoin SOAB for the 10+ years age band over the past couple of days:
The value of the metric seems to have been quite high in recent hours | Source: CryptoQuant
As shown in the above graph, the Bitcoin SOAB for this specific group has registered a large spike during the past day. In total, this surge in the metric has corresponded to around 1,433 BTC moving across wallets on the network.
The general cohort for all investors that have been holding their coins since more than 155 days ago is called the “long-term holder (LTH) group.” Statistically, the longer an investor holds onto their coins, the less likely they become to sell at any point. Due to this reason, the LTHs are considered the resolute hands of the market.
As the movement in question is coming from an investor who had been holding for more than 10+ years, the holder would have been one of the oldest ones among even these LTHs.
Such old supply, however, is usually considered to have been lost due to wallet seed phrases becoming inaccessible. This means that there is a big chance that the wallet activation today may have come because of a user rediscovering a previously lost wallet.
While movements from the LTHs are usually a bad sign for the market, as they show that even the diamond hands may have lost their belief in Bitcoin, this latest transaction wouldn’t be reflective of the general sentiment, considering the special circumstances around it if it’s truly coming from a lost address that has now been recovered.
Nonetheless, the transfer is still a probable sign that the coins are being moved around for selling-related purposes, so it’s possible that the asset may face some bearish impact from the move.
At the time of writing, Bitcoin is trading around $26,400, down 2% in the last week.
Looks like BTC has been consolidating sideways | Source: BTCUSD on TradingView
Featured image from Hans-Jurgen Mager on Unsplash.com, charts from TradingView.com, CryptoQuant.com