The cryptocurrency market is gaining momentum as dormant tokens such as both Bitcoin (BTC) and Ethereum (ETH) come back into circulation after long periods of inactivity. This increase in long-dormant assets changing hands has analysts raising eyebrows and predicting a potential increase in price volatility for both leading cryptocurrencies.
Bitcoin whales are taking action
Crypto analyst Ali Martinez recently highlighted the significant movement of dormant Bitcoin on Twitter. This marks the largest increase in the number of dormant BTC tokens traded in more than two years. Historically, such movements have been associated with “whales,” large crypto holders whose significant transactions can significantly impact market dynamics. The logic behind the volatility potential lies in the large size of these dormant tokens.
When large amounts of BTC suddenly hit the market, it could disrupt the delicate supply-demand balance and potentially trigger price fluctuations. This domino effect could lead to an increase or decrease in the value of Bitcoin. Ali Martinez’s report that more than 25,000 Bitcoins (approximately $1.60 billion) were moved to savings addresses further strengthens the “whale activity” theory. This represents the largest inflow into such wallets this year and suggests whales are potentially positioning themselves for future price movements.
What is the latest situation in BTC price?
cryptokoin.com According to data, Bitcoin is currently at $64,809, recovering slightly from its recent low of $60,771. Market watchers are bracing for more volatility in the short term. Although Bitcoin has seen an impressive 128% increase on a yearly basis, it is still 12.2% below its all-time high of $73,798. According to Ali, critical support levels to watch include $61,100, $56,685 and $51,530. On the upside, resistance points lie at $66,990 and $72,880.
Ethereum investors also took action
The dormant token phenomenon is not specific to Bitcoin. Ethereum (ETH) is also witnessing a reawakening of early investors. A new blockchain transaction uncovered by Lookonchain shows a dormant Ethereum wallet that has been inactive for almost nine years and transferred a whopping 2,000 ETH (about $6.7 million). This is not an isolated incident. Between 2014 and 2015, many other Ethereum ICO participants emerged from the shadows, moving their assets elsewhere after years of inactivity.
These movements point to more than one motivation. Early investors who purchased ETH at the ICO price received astronomical returns. Since the current price is significantly higher, selling or transferring these assets presents a lucrative opportunity to secure a profit. Liquidity needs, both personal and business, may also be driving these transactions.
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