Recovery activities for long-lasting Bitcoin whales could break prices, analysts said

The number of active Bitcoin (BTC) portfolios, many of which have long remained dormant, has seen an increase that could foretell some major market movements, Bloomberg reports on January 11.

Bloomberg bases its report on data and analysis from the launch of Crypto Analytics Flipside Crypto, which sealed the backing of the main Coinbase cryptographic exchange group and the crypto venture veteran Digital Currency Group (DCG) in November.

According to Flipside, as of October 2018, a large number of long-time inactive Bitcoin holders – defined as those who did not transfer their Bitcoin for a period of between six and thirty months – have started to transfer their coins, resulting in active portfolio on last month now holds about 60 percent of the circulating supply of the currency.

Overall, the active Bitcoin offer increased by 40% from the summer of 2018. Eric Stone, head of Flipside data division, commented:

"It's definitely a big change – it's more potential than usual for price fluctuations."

As Bloomberg notes, similar portfolio mixtures preceded the greater historical volatility of Bitcoin prices in both 2015 and 2017 – in the last year, the currency rose to historic highs of $ 20,000.

Flipside data for the number of inactive Bitcoin portfolios. Source: Bloomberg.com

The managing director of Flipside, David Balter, has pointed out to Bloomberg that he is above all long-time holders, many of whom have remained inactive during the volatile markets of the last two years, which are now back on the active radar. Stone added that the trend could continue, saying: "We have no reason to expect them to remain stagnant for another 2 years."

As Bloomberg notes, the property closely linked to the highest cryptocurrency – with around 1,000 portfolio addresses reported to own 85% of all Bitcoins – has generated the Bitcoin whale moniker, whose substantial holdings potentially confer a consequential power to move the markets.

Last October – at the height of the growing trend identified by Flipside – the blockchain research firm Chainalysis published its study of the 32 largest Bitcoin portfolios. These portfolios represent 1 million BTC, worth approximately $ 3.7 billion in terms of print time. Their data indicated that only about a third of the so-called whales were active traders, and these had "a network traded against the herd, buying a price drop". The study concluded that the so-called whales were not responsible for the price volatility.