Hibernation is done – How Bitcoin [BTC] bears, dormant wallets are making a move

• BTC’s price fell significantly, leading to a drop in market dominance
• Holders have been moving their assets either to cash in on gains or to avoid becoming a victim of wallet drain

Days after conversations around a possible Bitcoin [BTC] drive to $31,000 gained steam, the crypto’s price dropped sharply. At press time, the king coin, having registered a 79% hike as per Year-To-Date (YTD) performance, had depreciated. It was trading at $27,337 on the charts. 

Read Bitcoin’s [BTC] Price Prediction 2023-2024

Long time, no sleep

Bitcoin’s latest price drop has led to a surge in activity among previously dormant wallets. In fact, on 20 April, Lookonchain reported the reactivation of a nine-year-old wallet. 

Thereafter, the Twitter-famous pseudonymous on-chain activity tracker disclosed that another wallet did the same. This time, it was a 10-year-old wallet that was transferred to three separate wallets. 

While the motive behind these moves remains largely unknown, there is speculation that these holders transferred a part of the assets to take profits. In other circles, some thought the action was a safety precaution to escape wallet drainage.

On 18 April, an anonymous account informed the crypto-community about a wallet-wiping operation that has been happening since 2014. Although the user mentioned that it could not identify the source of the compromise, it advised long-term holders to split their assets or relocate holdings.

Apart from the possibility of a cash-out, the leading cryptocurrency has also been marred with a sharp drop in volume. This led investors to express concerns about the overall health of the market. 

According to CoinMarketCap, the global crypto-market cap fell by 2.97% in the last 24 hours. And, a principal suspect in this decline is the volume which dropped to $44.99 billion— A whopping 14.29% decrease within the same period.

Coping with the presence of the reds

The drop in market cap suggested that some smaller-cap assets outperformed BTC and most of the wider market was suffering from deprivation of liquidity. Consequently, this resulted in a reduction in Bitcoin’s market dominance.

Meanwhile, Bitcoin supply on exchanges has been increasing, despite a series of movements into self-custody in the past.

At the time of writing, Santiment’s data revealed that the metric had risen to 1.31 million.

Source: Santiment

This means that quite a number of investors sent their assets into platforms to take profit or to count their losses. A scenario like this could lay the grounds for increased selling pressure, especially as the exchange outflows diminish.

Realistic or not, here’s BTC’s market cap in XRP’s terms

In its present condition, BTC might find it difficult to exit the rapidly-appearing reds. Therefore, market participants might need to cope with a potential bearish season. 

Interestingly, long-positioned traders are already feeling the heat as $43.59 million in such positions were liquidated in the last 24 hours.

Source: Coinglass