Analyst: BTC may face selling pressure, $1.7 billion of BTC transferred to the chain

Author: Tom Mitchelhill, CoinTelegraph; Compiler: Wuzhu, Golden Finance

A recent $1.7 billion transfer of "dormant" Bitcoin may lead to increased selling pressure in the cryptocurrency market, according to an on-chain Bitcoin analyst.

In an article published to CryptoQuant on August 13, anonymous trader XBTManager wrote that a total of 29,206 bitcoins were transferred to the chain between August 11 and August 12, and these bitcoins had been idle for up to three years.

Between August 11 and August 12, 29,206 dormant BTC were transferred. Source: CryptoQuant

XBT said that on August 11, 18,536 BTC that had been idle for 2-3 years were transferred, which put obvious pressure on the Bitcoin price. A few hours later, another 5,684 BTC that had been idle for 3-6 months were also transferred.

On August 12, 4,986 BTC that had been idle for 3-12 months and 2,394 BTC that had been idle for 3-5 years were moved on-chain.

“When these long-idle Bitcoins are moved, it typically leads to increased selling pressure in the market. At times of low liquidity, this can put downward pressure on prices, which is likely to continue.”

In an August 14 investment note seen by Cointelegraph, IG market analyst Tony Sycamore took a more optimistic view on Bitcoin’s medium-term trend, noting that the macro environment is strengthening after last week’s $500 billion cryptocurrency market sell-off.

Sycamore said that Bitcoin was "boosted by the continued improvement in risk sentiment and the sell-off in U.S. yields" after the U.S. PPI data came in lower than expected.

"After last week's false breakout above $50,000, positions have clearly decreased and we expect Bitcoin to extend its gains in the coming sessions towards trend channel resistance around $70,000."

In an August 13 market report, Glassnode analysts said that the current market is characterized by "significant uncertainty." However, they noted that market participants are beginning to show a preference for HODLing.

For more information, please refer to the Golden Finance article"Glassnode: Who is buying cryptocurrencies in the current market state? 》

Analysts said that following Bitcoin's all-time high in March, the cryptocurrency market is facing a period of widespread "supply distribution" - a technical way of saying that funds are being transferred in large quantities.

“Over the past few weeks, this trend has shown early signs of a reversal, especially for the largest wallets typically associated with ETFs. These large wallets appear to be returning to accumulation mode,” the analysts wrote.

Large wallets are once again hoarding Bitcoin. Source: Glassnode

Overall, the analysts concluded, the current on-chain conditions indicate a “high conviction undertone” among the community of Bitcoin holders.