Bitcoin recently reached a local high of $60,100 before settling around $58,894, sparking renewed bullish sentiment among investors and long-term holders. Despite this upward movement, the leading cryptocurrency remains in a consolidation phase, experiencing three consecutive days of gains.
The daily trading volume for Bitcoin has dropped by 42%, currently hovering around $14.7 billion. Typically, a decline in trading volume suggests a cooling period and reduced price volatility. According to data from Santiment, Bitcoin’s five-year dormant circulation has dropped to 104 BTC, one of the lowest levels observed this year. This metric had spiked to 16,592 BTC on July 23 when Bitcoin was trading around $66,000.
The one-year dormant circulation of Bitcoin also saw a significant decrease, falling from 6,040 BTC on August 15 to 1,412 BTC at the time of reporting. A decline in dormant circulation often indicates that long-term holders are taking profits, which tends to increase during periods of high prices. As of now, many long-term Bitcoin addresses have either taken their profits or remain inactive.
Additionally, Santiment data reveals a consistent decrease in whale transactions involving at least $100,000 worth of Bitcoin over the past three days. The number of such transactions dropped from 9,295 on August 15 to 5,309 at the time of reporting. A decrease in whale activity generally leads to lower price volatility, as it reduces the likelihood of large-scale price manipulations.
Contributing to the bullish sentiment is the recent inflow of over $36 million into spot Bitcoin exchange-traded funds (ETFs) in the U.S., as reported on August 17. This influx of capital has helped Bitcoin recover the $59,000 mark, reinforcing positive market sentiment among investors and long-term holders.
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