Bitcoin Mid-Term Holders Move 50,000 BTC, Bearish Signal?
On-chain data shows that Bitcoin “interim holders” have been spotted moving 50,000 BTC on-chain, a sign that could be bearish for the price.
Bitcoin tokens between 3-6 months have moved recently
As pointed out by an analyst in a CryptoQuant post, this type of trend has proven volatile for the cryptocurrency in the past. The relevant indicator here is “Spent Output Age Bands” (SOAB), which tells us the total amount of Bitcoin moved on the network by each of the age bands.
The “age bands” here refer to groups of coins divided into based on the total time they have been dormant inside a single wallet address. For example, the 1-3 month age band includes all coins that have been idle on the blockchain since at least one month and no more than three months ago.
If the SOAB metric is applied to this particular group, it will track the movements made by the investors holding said coins. Now, here’s a chart showing the trend in Bitcoin SOAB for specifically the 3-6 month age group over the last few years:
The value of the metric seems to have been quite high in recent days | Source: CryptoQuant
As you can see in the graph above, the quant has highlighted the important points in the trend of the Bitcoin SOAB indicator for the age group 3-6 months.
It generally appears that when the calculation has registered a sharp peak, the price of the cryptocurrency has observed some volatility. It also appears that most such cases saw the price of the asset fall shortly after the peaks were formed (marked in red in the chart), while only a few of them (highlighted in green) were followed by the cryptocurrency shown sideways or upward movement.
Usually, when old coins move, it is a sign that the holders want to sell. Also, it is a statistical fact that the longer investors hold their coins, the less likely they are to sell at any time. This means that when old coins are on the move, it’s a sign that even the more resolute Bitcoin investors may have wavered.
In the current case, the age of the coins is less than six months, so this supply is not that old yet. However, since these coins are still on the verge of becoming “long-term owners” (investors with coins dormant for more than six months), the movements of this group can still have significant implications for the market.
From the chart, it is clear that these investors, who are sometimes called “interim holders” because of their position just below the long-term owners, have made another big move recently.
In this increase, medium-term holders have transferred a total of 50,000 BTC (about $1.3 billion at current exchange rates) on the network. It is currently uncertain whether this peak is a sign of selling by these investors or if it is simply a move made for another purpose, such as switching wallets, but if the historical trend is anything to go by, these peaks generally have not ended good for the cryptocurrency.
BTC price
At the time of writing, Bitcoin is trading around $26,700, down 5% in the last week.
Looks like BTC has declined in the last day | Source: BTCUSD on TradingView
Featured image from Thought Catalog on Unsplash.com, Charts from TradingView.com, CryptoQuant.com
