A recent report by Bloomberg cites a reduction in the number of idle Bitcoin wallets as a primary reason for the latest price surge. But is that really the case?
Idle Bitcoin Wallets Plunge
Citing a research from market intelligence firm Flipside Crypto, Bloomberg reports that a high number of Bitcoin wallets have become active throughout the course of the past two weeks.
According to the study, their number has increased by as much as 40 percent since March 15th. Commenting on the matter was Eric Stone, co-founder and head of Data Science at Flipside, who said:
If you are a crypto optimist, that’s good news […] There are more people warming up to the idea of buying Bitcoin.
The expert goes on to explain that sudden spikes in Bitcoin’s price are typically caused by whales, or large investors, shifting their positions. He reiterates that this is what caused Bitcoin’s plunge with 40 percent last fall.
We see this move much more valid than a few whale moves in October. […] This probably signifies a change in perception or confidence in this asset class. – Said Flipside’s CEO.
Is That Really the Case for Bitcoin’s Latest Rally?
While it’s definitely true that increased wallet activity could, in theory, signal a shift in sentiment, jumping to conclusions of the kind might be a bit preemptive.
Reuters recently reported that the latest 20 percent surge in Bitcoin’s price coincided by a major order set by an anonymous buyer, which in turn set off a frenzy of computer-driven trading. That’s according to analyst Oliver Von Landsberg-Sadie, CEO at cryptocurrency company BCB Group.
There has been a single order that has been algorithmically-managed across these three venues, of around 20,000 BTC. […] If you look at the volumes on each of those three exchanges – there were in-concert, synchronized, units of volume of around 7,000 BTC in an hour.
Meanwhile, Bitcoin (BTC), is currently trading at around $5,000. The cryptocurrency has pulled back from the point of $5,300, marking losses of about 6 percent throughout the past 24 hours. Still, it continues to trade upwards of 20 percent more during this week.
What do you think caused the latest spike in Bitcoin’s price? Share your thoughts down below!
Charts courtesy of TradingView