Bitcoin price is at a pivotal moment, about to potentially confirm a break out into a new bull market. Yet for some reason, coin dormancy, what one analyst calls a measure of “old hands” selling, is reaching a high level currently.
These holders sold the Bitcoin bottom fearing lower prices, but why then are these same “old hands” selling again now with a rally on the horizon?
“Old Hands” That Are Anything But Weak Chose Now To Sell Bitcoin, But Why?
The cryptocurrency market is a wild west of weirdness, where food-named tokens skyrocket, then fall to zero, and exchange CEOs are the target of chief financial regulators.
Terms like “HODL” are commonplace, an acronym for “hold on for dear life.” Those that have been through the bear market, have “strong hands” while “weak hands” like Barstool Sports founder David Portnoy sell at the first sign of trouble.
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But “old hands?” The not often as talked-about group of holders are selling right now, according to a top crypto fundamental expert, even though Bitcoin could be on the brink of its next bull run.
The question is then, why? These “old hands” aren’t weak, and have held a very long time. But are they really all that “strong” to be selling ahead of a rally that nearly everyone that has heard of Bitcoin is anticipating? However, that itself could be the answer.
Three Times During Recent Cycle "Old Hands" Sold | Source: BTCUSD on TradingView.com
Could Dormant Coins Provide Clues To If The Crypto Bear Market Is Over?
The Bitcoin bull run could be a crowded trade for the time being. If everyone is expecting upside, then the market could struggle to move up. During the last bear market, there wasn’t a precedence to go by in terms of the halving and its potential influence on price action.
The halving and the fact that prices still haven’t taken off like a rocket ship could be prompting these old-timers.
According to Willy Woo, who shared a glassnode chart referencing “coin dormancy” which he says represent the old hand sellers, old sellers in the past have nailed the timing of tops.
Coin Dormancy 90-Day Moving Average | Source: glassnode
This cycle, however, “old hands” sold the bottom in 2018, again when Bitcoin broke down in September 2019, and again now.
But Woo could be wrong himself here about these old-timers getting the timing wrong. Aside from the anomaly at Bitcoin’s bottom, where they likely feared the worst, the 2019 selloff wasn’t too far off from the peak. And Woo was claiming then that Bitcoin would move sideways and reclaim $10,000, then never look back.
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And if Bitcoin begins plummeting again here, they’ve only have gotten it wrong just once in the history of the cryptocurrency.
It is also worth pointing out, that according to the 90-day coin dormancy moving average Woo shares, looks instead to have just completed the same V-shaped bottom as July 2014. If this is where Bitcoin is instead, and these old-timers have it right, then the bear market truly hasn’t begun, and any chances of a bull market will be years away.
Featured image from Deposit Photos, Charts from TradingView.com and glassnode