Bitcoin is currently hovering around $3,500 while recording the daily trading volume of $5 billion in the past 24-hours. For the past few days, the trading volume is seeing a lot of activity, swinging from $7 billion to $4.5 billion. Given the fact that since October 2018, inactive Bitcoin wallets have been no longer dormant, trading volume has to be affected.
This could turn out to be either really good or very bad news for the leading cryptocurrency. Last week, Bitcoin dropped to $3,600 after having a green start of the new year by recovering short term and retaking $4k. Since then Bitcoin is trading near $3,500 level.
With the Bitcoin wallets now sprung to life, it could bring a wave of buying or selling in the market. According to the data provided by the Flipside Crypto, the number of inactive accounts has taken a dip.
Meanwhile, the number of accounts buying, selling, trading or transferring the Bitcoin has surged since late last year.
These bitcoin accounts that have started showing signs of life have been growing since October 2018. For a long time i.e. about six months to two and a half years, these holders haven’t touched their coins. Now, the trend of waking from hibernation is gaining traction since the start of the new year.
According to Eric Stone, the head of data science at Flipside, the actively traded supply of Bitcoin has risen about 40 percent since last summer.
History May Not Repeat But It Rhymes
The similar patterns have been seen right before the large price swings that took place in 2015 and 2017 when Bitcoin skyrocketed to its all-time high at $20,000. According to the Boston-based firm, these digital wallets that became active in the last 30-days holds about 60 percent of the total circulating supply of the Bitcoin. So, this resurgence of whales has the potential to bring in greater volatility in the market.
Stone recently said in an interview,
“It’s definitely a big shift. There’s more potential than usual for price swings.”
Whales have a big presence in the bitcoin market as about 1,000 addresses control about 85 percent of the Bitcoins. These whales also include many early investors that may have remained inactive in the past two years when Bitcoin surged to great heights only to crash back to the $3,100 low.
David Balter, the Chief executive of Flipside also shared,
“We’ve definitely seen that many long-time holders of Bitcoin are becoming active.”
“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 another 2-plus years,”