Bitcoin, the largest cryptocurrency by market cap, recently witnessed its biggest spike in trading of dormant tokens in over two years. This major uptick in activity means Bitcoin tokens that haven’t moved for an extended period are suddenly changing hands, which analysts believe could soon be a precursor to increased price volatility.
Bitcoin, the largest cryptocurrency by market cap, recently witnessed its biggest spike in trading of dormant tokens in over two years. This major uptick in activity means Bitcoin tokens that haven’t moved for an extended period are suddenly changing hands, which analysts believe could soon be a precursor to increased price volatility.
Cryptographic analyst Ali noted in a new tweet that Bitcoin just witnessed its biggest surge in dormant BTC tokens changing hands in over two years.
Historically, these movements have been associated with large holders, or “whales,” who own large amounts of Bitcoin and can influence market dynamics due to the size of their transactions.
The increase in dormant BTC tokens changing hands could significantly impact the price of Bitcoin. Historically, increased activity among dormant tokens has often preceded periods of increased price volatility in cryptocurrency markets.
According to Ali, the increase in idle BTC tokens being traded could indicate a possible increase in price volatility in the future. The reason is that large and sudden transactions can cause a domino effect, impacting the balance between supply and demand and, consequently, the price.
In a separate tweet, Ali reported that more than 25,000 Bitcoins, worth around $1.60 billion, were moved to accumulation addresses, the largest influx to these BTC wallets this year and indicating increased whale activity.
Bitcoin (BTC) fell to a low of $60,771 in the past week and is now trading at $64,809, and market watchers expect further volatility in the near term. Bitcoin is up approximately 128% year-over-year, while it is down 12.2% from its all-time high of $73,798 set on March 14.
According to Ali, critical Bitcoin support levels to watch include $61,100, $56,685, and $51,530. On the other hand, the important resistance points for BTC are $66,990 and $72,880.
