Dormant Bitcoin Activity Triggers Crypto Market Volatility: Selling Pressure and Upward Expectations Intertwine Recent market analysis indicates that the sudden movement of approximately $1.7 billion worth of dormant Bitcoin could intensify selling pressure in the cryptocurrency market
Dormant Bitcoin Activity Triggers Crypto Market Volatility: Selling Pressure and Upward Expectations Intertwine
Recent market analysis indicates that the sudden movement of approximately $1.7 billion worth of dormant Bitcoin could intensify selling pressure in the cryptocurrency market. According to XBTManager, an anonymous analyst at CryptoQuant, between August 11th and 12th, 29,206 Bitcoins that had been dormant for three years were transferred to the blockchain. Notably, the movement of 18,536 Bitcoins dormant for 2-3 years had a direct impact on Bitcoin's price. Analysts warn that as these long-dormant Bitcoins become active, the market could face greater selling pressure.
However, analyst Tony Sycamore holds a different perspective. He believes that Bitcoin is poised for an upward trajectory in the medium term, fueled by improvements in the macroeconomic environment. He points out that Bitcoin could potentially rise to the trend channel resistance level near $70,000 in the future. Glassnode analysts observe a strengthening preference among long-term Bitcoin holders. Specifically, the market is exhibiting a high degree of confidence, with early signs of accumulation in large ETF-related wallets.
This recent movement of dormant Bitcoin, combined with the diverse viewpoints of market analysts, suggests these factors will serve as important reference points for participants in the cryptocurrency market.
Beyond the dormant Bitcoin activity, the cryptocurrency market has been influenced by other recent events. Riot Platforms recently increased its stake in the Bitcoin mining company Bitfarms to 18.9%. On August 13th (local time), Riot acquired an additional 1 million shares of Bitfarms common stock, expanding its holding to approximately 85.3 million shares, equivalent to about 0.22% of Bitfarms' outstanding shares. Bitfarms announced that its co-founder and board chair, Nicolas Bonta, would immediately leave the company. Bonta was one of three board members Riot sought to replace. The two companies have been embroiled in a dispute over Riot's acquisition proposal since last April. Riot initially offered to buy Bitfarms for $950 million, but the offer was rejected. To prevent a hostile takeover, Bitfarms introduced a "poison pill" provision, a shareholder rights plan designed to defend against hostile takeovers. Riot stated its willingness to negotiate with the reorganized board.
Influenced by the rise in the New York Stock Exchange, the cryptocurrency market, led by Bitcoin, surged on August 13th. Bitcoin briefly dipped below $59,000 before rebounding to $61,000, but subsequently declined again. The release of the US Producer Price Index (PPI) for July, which came in lower than anticipated, further confirmed the trend of slowing inflation, bolstering market expectations for a rate cut by the Federal Reserve. The PPI rose 0.1% month-over-month in July, below the Dow Jones forecast of 0.2%. Year-over-year, the PPI increased by 2.2%, significantly lower than the 2.7% growth recorded in June. As of that day, CMEFedWatch predicted a 54.5% probability of a 50 basis point interest rate cut by the Fed in September, an increase of 4.5 percentage points from the previous day. According to CNBC, TradeStation expert David Russell stated: "Today's PPI data further confirms that inflation is turning, particularly in the services sector."
As of 3:45 PM EST on August 13th, CoinMarketCap data showed that the cryptocurrency market capitalization stood at $2.12 trillion, representing a 1.57% increase from the previous day. Compared to before the PPI data release, the market cap had increased by $40 billion. Bitcoin traded at $60,687.77, up 2.63% from the previous day, while Ethereum rose 1.93% to $2710.06.
On the Chicago Mercantile Exchange (CME), August Bitcoin futures contracts rose 2.58% to $60,730, September contracts increased 2.66% to $61,285, and October contracts gained 3.04% to $61,960. Ethereum August contracts climbed 0.86% to $2691.50, while September contracts jumped 0.91% to $2712.00. According to FarsideInvestors data, both Bitcoin and Ethereum spot ETFs that were listed on the New York Stock Exchange the previous day recorded small net inflows, indicating that investors were buying on the dip. Bitcoin spot ETF saw net inflows of $27.8 million, while Ethereum spot ETF witnessed net inflows of $5 million, marking a return to positive inflows after four days.
In conclusion, the movement of dormant Bitcoin, shifts in the macroeconomic environment, and intensified market expectations for a Federal Reserve rate cut collectively constitute the primary drivers of recent volatility in the cryptocurrency market. Investors should closely monitor these evolving factors and make well-informed investment decisions based on their individual risk appetites.
Disclaimer: The content of this article is sourced from the internet. The copyright of the text, images, and other materials belongs to the original author. The platform reprints the materials for the purpose of conveying more information. The content of the article is for reference and learning only, and should not be used for commercial purposes. If it infringes on your legitimate rights and interests, please contact us promptly and we will handle it as soon as possible! We respect copyright and are committed to protecting it. Thank you for sharing.(Email:[email protected])
