Dormant Bitcoin Whales are about to make some noise on the market
|- The number of active Bitcoin wallets has been growing since October 2018.
- A resurgence of whales may become a source of great market volatility.
Experts of a research and analytics provider Flipside Crypto noticed that an increased number of dormant bitcoin wallets have been showing signs of life.
Holders, that hadn't touched their coins for a long period from six months up to two and a half years, have been recovering from a hibernation state since October. The trend is gaining traction as now over 60% of all coins mined so far is stored in active wallets - those that have been active within the recent 30 days.
“It’s definitely a big shift. There’s more potential than usual for price swings," Eric Stone, head of data science at Flipside, explained in an interview with Bloomberg.
A similar surge of wallets activity was registered ahead of strong growth of cryptocurrency market volatility in 2015 and 2017. In 2017 it pushed the digital coin to its all-time high close to $20 000.
It is worth noting, that the industry is plagued by a so-called concentration of ownership. About 1,000 of wallets control 85% of Bitcoins in circulation. Those holders are known as whales and many of them have been dormant during the recent years that saw Bitcoin surge to eye-watering $20 00o and collapse back to $3,100.
“We’ve definitely seen that many long-time holders of Bitcoin are becoming active," David Balter, chief executive officer of Flipside, explained.
“The fact that those wallets have been recently active leads us to believe they could soon be active again. Put another way: We have no reason to expect them to remain stagnant for other 2-plus years,” he added.
This development may result in the strong growth of Bitcoin volatility, while the direction of the price movements is still unclear. We shall wait and see how things will play out.
BTC/USD is hovering around $3,500 handle. The coin touched $4,110 during the previous week and lost 15% of its value since that time. A failure to get back above $3,800 handle will bode ill for the short-term perspectives of the coin. Another wave of sell-off may take it to the lowest level of 2018 at $3,127.
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