On-chain data shows a large amount of Bitcoin sitting dormant since between 5 and 7 years ago has moved recently, a sign that may be bearish for the price.
5+ Years Old 1,005 BTC Has Been Recently Moved On The Bitcoin Blockchain
As pointed out by an analyst in a CryptoQuant post, there is a possibility that this move could cause a drop in the price of the asset. The indicator of interest here is the “Spent Output Age Bands” (SOAB), which tells us about the amount of Bitcoin that each age band in the market is spending or moving on the chain currently.
The “age bands” here refer to groups of coins divided based on the criteria of how much time they have been sitting still on the chain. For example, the 1-week to 1-month band includes all coins that haven’t moved from a single address since between one week and one month ago.
Now, here is a chart that shows the trend in the SOAB data for most of the age bands in the Bitcoin market over the last few days:
As shown in the above graph, the highest spikes that the Bitcoin SOAB metric has registered during recent days have come from the 1-week to 1-month age band. This naturally makes sense, as a large amount of BTC supply constantly keeps churning without sitting still for too long due to trading activity and other reasons.
A spike in the chart that stands out is the one from the 5-7 years age band, which took place a couple of days ago. This was an unusually large spike, as this group doesn’t tend to make too many moves. In total, about 1,005 BTC aged in this range were shifted on the blockchain during this spike.
Investors that hold their coins for longer than six months are termed “long-term holders” (LTHs). This means that the holders responsible for this spike were a section of the LTHs.
Statistically speaking, the longer an investor holds onto their coins, the less likely they become to sell them at any point. Because of this reason, LTHs are made up of the more resolute holders in the market.
Since the coins that moved recently were on the older side for even the LTHs, it could be a sign that even the diamond hands of the network may be becoming tempted to sell at the current price levels.
The exchange inflow SOAB, a modified version of the indicator that only tracks transactions going towards centralized exchanges, hasn’t yet registered any appreciable spikes from the 5-7 years cohort.
Generally, investors use exchanges for selling, so if these coins didn’t move towards such platforms, there is a chance the movement wasn’t made for distribution after all. There is, however, still the possibility that the holders involved may just be selling through over-the-counter (OTC) deals, which, if true, could be bearish for the price.
BTC Price
At the time of writing, Bitcoin is trading around $28,500, up 1% in the last week.
