Bitcoin Mid-Term Holders Move 50,000 BTC, Bearish Signal?
On-chain data shows the Bitcoin “mid-term holders” have been spotted moving 50,000 BTC on the chain, a sign that may be bearish for the price.
Bitcoin Tokens Aged Between 3-6 Months Have Moved Recently
As pointed out by an analyst in a CryptoQuant post, this kind of trend has proved to be volatile for the cryptocurrency in the past. The relevant indicator here is the “Spent Output Age Bands” (SOAB), which tells us about the total amount of Bitcoin that’s being moved on the network by each of the age bands.
The “age bands” here refer to groups of coins divided based on the total amount of time they have been dormant inside a single wallet address. The 1-3 months age band, for example, includes all coins that have been sitting still on the blockchain since at least one month and at most three months ago.
If the SOAB metric is applied to this particular group, then it would track the movements being made by the investors holding said coins. Now, here is a chart that shows the trend in the Bitcoin SOAB for specifically the 3-6 months age band over the last few years:
As you can see in the above graph, the quant has highlighted the important points of the trend for the Bitcoin SOAB indicator for the 3-6 months age band.
It looks like generally, whenever the metric has registered a sharp spike, the price of the cryptocurrency has observed some volatility. It also appears like the majority of such instances saw the price of the asset decline shortly after the spikes formed (marked in red in the chart), while only a few of them (highlighted in green) was followed by the cryptocurrency displaying sideways or upwards movement.
Generally, whenever aged coins move, it’s a sign that the holders are looking to sell. Also, it’s a statistical fact that the longer investors hold onto their coins, the less likely they become to sell at any point. This means that when aged coins are on the move, it’s a sign that even the more resolute Bitcoin investors may have faltered.
In the current case, the age of the coins is less than six months, so this supply isn’t that old yet. However, since these coins are still on the verge of aging into “long-term holders” (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’s apparent that these investors, who are sometimes termed the “mid-term holders” because of their placement just below the long-term holders, have made another large move recently.
In this spike, the mid-term holders have transferred a total of 50,000 BTC (about $1.3 billion at the current exchange rate) on the network. It’s currently uncertain whether this spike is a sign of selling from these investors or if it’s just a movement done for another purpose, like changing wallets, but if the historical trend is anything to go by, these spikes have generally not ended well for the cryptocurrency.
At the time of writing, Bitcoin is trading around $26,700, down 5% in the last week.