Bitcoin briefly reached a local high of $60,100 before settling around $58,894. Despite three consecutive days of gains, the cryptocurrency remains in a consolidation phase. Daily trading volume for Bitcoin has decreased by 42% to around $14.7 billion, indicating a possible cool-down and reduced price volatility. Data from Santiment shows that Bitcoin's five-year dormant circulation is currently low at 104 BTC, down from 16,592 BTC on July 23 when the price was around $66,000. The one-year dormant circulation also fell significantly from 6,040 BTC on August 15 to 1,412 BTC. This decline suggests that long-term holders may have taken profits and are now inactive. Additionally, whale transactions (large transactions of at least $100,000 worth of BTC) have dropped from 9,295 on August 15 to 5,309, signaling reduced whale activity and lower price volatility. Meanwhile, Bitcoin exchange-traded funds (ETFs) in the U.S. saw over $36 million in net inflows, contributing to bullish sentiment and the recovery of Bitcoin's price above $59,000.
Prediction:
Given the decline in trading volume and whale activity, Bitcoin may experience lower price volatility in the short term, as fewer large transactions reduce the likelihood of sudden price swings. The drop in dormant circulation also indicates that long-term holders may have already taken profits, potentially leading to a period of consolidation as new buyers enter the market. However, the positive inflows into Bitcoin ETFs suggest ongoing institutional interest, which could support the price and possibly lead to a gradual recovery. If this trend continues, Bitcoin might maintain its current levels or gradually move higher, but without the extreme volatility seen in previous weeks.
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