On-chain data shows that some of the dormant bitcoin supply is going public again, which could be bearish for the crypto’s price.
Bitcoin exchange inflow for old coins has been observing spikes over the past few days
As one analyst pointed out in a CryptoQuant post, some coins have recently been deposited on exchanges in the 2-3 year and 3-5 year age groups.
The “Exchange Inflow” is an indicator that measures the total amount of Bitcoin transferred into the wallets of all centralized exchanges.
When the value of this metric is high, it means that investors are depositing large amounts on exchanges right now. Such a trend, if sustained, can prove bearish for the value of the crypto as it can be a sign of holder dumping.
A modified version of this indicator is the exchange inflow “Spent Output Age Bands” (SOAB), which gives us information about the individual contribution to the total inflows of the different provider groups in the market.
These cohorts are categorized by the amount of time their coins have retired. The relevant age groups here are “2-3 years” and “3-5 years”; The following graphic shows the development of foreign exchange inflows from these deliveries:
It looks like the value of the metric for these cohorts has increased in the past few days | Source: CryptoQuant
As you can see in the chart above, the Bitcoin exchange SOAB inflow for these coin groups has been increasing over the past few days or so.
This means that some investors have deposited significant amounts of coins between 2 and 3 years old and those between 3 and 5 years old.
Such an old stock is referred to as a “long-term holder” stock. In general, the older the coins are, the less likely they are to move at some point.
Therefore, any movement from these coins, especially to exchanges, can have a noticeable impact on the price of Bitcoin.
BTC price
At the time of writing, the price of Bitcoin is hovering around $19.1k, up 1% over the past seven days. Over the past month, the crypto has lost 1% in value.
The chart below shows the evolution of the coin’s price over the last five days.
The value of the crypto seems to have recovered from the plunge a few days ago | Source: BTCUSD on TradingView
Bitcoin has continued to show stale price action over the past week as the crypto has mostly hovered around the $19,000 level. Roughly two days ago, BTC made an attempt to break the monotony by falling below $18.7k, but it didn’t take long for the coin to regain $19k.
Featured image by Max Saeling on Unsplash.com, charts by TradingView.com, CryptoQuant.com
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