Dormant Bitcoin at low numbers amid presumed profit taking

Despite market enthusiasm, the amount of Bitcoin lying dormant in digital wallets is hovering at low levels.

Low dormant Bitcoin (BTC) levels are a potential warning sign for the cryptocurrency. The reason is that spikes in dormant Bitcoin usually preceded rallies, given that dormant Bitcoin is not being sold, effectively resulting in a lower circulating supply. Long-term investors have likely decided to take profit amid ongoing market enthusiasm.

Only 1,832 BTC have gone without spending over the past two years, down sharply from over 30,000 in late December, according to data from the blockchain analytics firm Glassnode. Such low dormancy levels for the world’s largest cryptocurrency frequently precede major price swings.

When dormancy runs high, it suggests Bitcoin holders believe they’re better off doing nothing with their stash. Low dormancy levels indicate more holders are on the move, possibly to sell or trade. The number of Bitcoins lying untouched for five years has also declined, from almost 16,400 in December to around 300.

Bitcoin is also currently trending on social media, with Santiment indicating that it has topped its social dominance chart, responsible for 3.5% of all the detected crypto-related social media posts. The summary of the trend suggests that it is mostly discussed in anticipation of the approval of a spot Bitcoin exchange-traded fund by the United States Securities and Exchange Commission (SEC) — which apparently many long-term holders have seen as an occasion to sell high.