Bitcoin (BTC) is experiencing uncertainty as the resurgence of dormant coins occurs alongside low demand in the spot market. Recent on-chain data indicates that numerous long-held BTC have re-entered circulation. While typically a positive sign for the coin’s value, the current low demand may exert additional downward pressure on Bitcoin’s price.
In a recent post on X, Lookonchain highlighted that a significant Bitcoin whale withdrew 250 BTC from Binance after six months of inactivity. This activity correlated with a sharp increase in Bitcoin’s Age Consumed metric, which tracks the circulation of long-held coins. On that day, the metric surged by 1026%, hitting 82.1 million — the highest level in over 90 days.
This spike is noteworthy, as long-term holders typically do not move their coins. When such movements occur, they often indicate a shift in market trends. Historically, dormant BTC returning to circulation is seen as a positive indicator for future price movements, signaling renewed activity from strategic long-term holders.
For the positive scenario to unfold, the re-entry of dormant coins must align with strong market demand. If these inactive coins circulate during a period of weak demand, it could increase selling pressure, potentially driving Bitcoin's price lower — a scenario currently unfolding in the market.
Bitcoin's declining Chaikin Money Flow (CMF) further illustrates this weak demand. Currently, the CMF sits at -0.13, below the zero line, indicating a liquidity exit and that more traders are selling off their Bitcoin holdings, adding to bearish pressure.
The recent increase in BTC’s supply without corresponding demand may lead to a price drop. According to BTC’s Fibonacci Retracement levels, if selling pressure continues, the price could fall under $60,000, testing support at $58,464. If this level is not defended, Bitcoin could drop to $54,847.
However, if there is a surge in new demand, the previously dormant coins could be absorbed by buyers, potentially driving the price higher and negating the bearish outlook. In such a case, Bitcoin’s price could reach $68,474.
