Analysts are now believing that the price of Bitcoin could soon see significant action. Specifically, the notion that cryptocurrency traders may be in for an unstable period is based on an uptick in the number of active Bitcoin wallets.
Many previously dormant Bitcoin wallets have recently become active
This news comes in a fresh piece from Bloomberg. Moreover, the article is based on data and analyses done by the cryptocurrency analytics startup firm Flipside Crypto. Flipside Crypto is known to be backed by venture capital firm Digital Currency Group, as well as the major cryptocurrency exchange Coinbase.
Put simply, the article notes that a large number of previously dormant Bitcoin wallets have become active lately. Flipside Crypto reports that cryptocurrency wallets that have been active over the last month are now holding approximately 60% of the total circulating Bitcoin supply.
Furthermore, it would seem this is part of an ongoing trend. The supply of active Bitcoins have supposedly increased by a marked 40% since that of last summer. Flipside Crypto’s head of data science, Eric Stone, noted that this is ”definitely a big shift,” and added that this means there is an increased potential for price movements.
It should be added that there is clear historical precedent for this being the case. For example, the number of inactive Bitcoin wallets fell to a low prior to 2017’s price rally.
Unclear whether activated Bitcoin wallets will be sellers or buyers
Flipside Crypto’s CEO, David Balter, was quoted in the Bloomberg piece explaining that long-term Bitcoin holders are now becoming more active. These holders have mainly remained idle during the last years’ market volatility, but would appear to now be taking a more active stance.
“The fact that those wallets have been recently active leads us to believe they could soon be active again,” Stone noted to Bloomberg. “Put another way: We have no reason to expect them to remain stagnant for another 2-plus years.”
So-called ”Bitcoin whales” – approximately 1,000 wallet addresses that control a majority of all Bitcoins – could have a dramatic effect on the price of Bitcoin, if they begin actively trading their holdings.
However, there is some uncertainty as to what the actual effects of this will be. It is currently unknown whether these recently activated wallets will be buyers or sellers. Either way, it would appear that the markets may soon experience some upheaval as a result.
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Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the cryptocurrency industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.