A large amount of Bitcoin mined in 2010 was sent to Coinbase after the leading digital asset hit a new all-time high, suggesting that some of the earliest Bitcoin miners are cashing out their old block rewards.
Posted March 5, 2024 at 11:34 pm EST.
Bitcoin’s trip to a new all-time high ahead of $69,000 was short-lived, and its price has since seen an 8.5% decline to around $63,100. At least some of the negative price action likely has something to do with a large chunk of decade-old bitcoin that was sold on Tuesday.
On-chain data from CryptoQuant shows that 1,000 bitcoin, worth around $69 million, was sent to Coinbase by an address that has been around since 2010, right before bitcoin reached its new record. When a large amount of coins are sent to a crypto exchange, it is typically an indication that the sender intends to sell them and take profits.
NEW: It appears that a large amount of #Bitcoin mined in 2010 was dumped following the ATH, partially contributing to today’s price correction 👀 pic.twitter.com/QeJ2s6kJLb
— Jason A. Williams (@GoingParabolic) March 5, 2024
CryptoQuant attributes this activity to miners, implying that those that mined some of the first bitcoins in existence could finally be cashing out the block rewards they earned 10 years ago.
Analysts also believe that there isn’t enough liquidity in the market to absorb these large sell orders, particularly in light of the number of short-sellers waiting to enter at these levels.
“Considering that the exchange order book shows 5-10 bitcoins of liquidity for every $100 price change, a sell-off of 1,000 bitcoins is highly likely to trigger a significant price drop,” CryptoQuant analyst said to CoinDesk in an interview.
The selloff triggered large-scale liquidations for those in leveraged long positions, with more than $1 billion worth of liquidations recorded on Binance alone, according to QCP Asia.
“Despite the leverage washout, term futures are surprisingly still trading at a good premium to spot, making the cash and carry trade much more attractive,” noted QCP analysts.
Meanwhile, spot bitcoin exchange-traded funds (ETFs) are seeing significant trading activity, with the ten funds recording a cumulative $10 billion in volume on Tuesday.
MILESTONE: the ten Bitcoin ETFs did $10b in volume today, smashing prev record set last Wed.. Volatility and volume go hand in hand with ETFs so not totally surprised. That said these are bananas numbers for ETfs under 2mo old. $IBIT, $FBTC, $BITB, $ARKB all w record days. pic.twitter.com/rIdbhoYifV
— Eric Balchunas (@EricBalchunas) March 5, 2024
Bloomberg ETF analyst Eric Balchunas noted that the ProShares Short Bitcoin Strategy ETF, whose holders bet on a falling bitcoin price, saw the most volume on the day.
