• The United States government made a large transfer of 49,000 Bitcoin on March 8, worth $1 billion. This caused a noticeable spike in the coin days destroyed (CDD) metric which often precedes price volatility.
• Exchange inflow data shows that only 5,000 BTC was moved out of exchanges and the $215 million transferred to Coinbase has had little impact yet.
• Currently, BTC/USD is trading above support between $21,500 and $21,950 which is encouraging for buyers despite negative news this week.
US Government Transfers 1 Billion in Bitcoin
On March 8th 2021 addresses linked to the United States government transferred 49,000 Bitcoin worth approximately $1 billion. The transfer caused a spike in the coin days destroyed (CDD) metric which often precedes price volatility.
Exchange Inflow Data Shows Little Impact
Analysis of exchange inflow data revealed that only 5,000 BTC (worth around $100 million) was moved out of exchanges in the last 24 hours. The transfer to Coinbase had little impact yet due to it making up only 20% of the total amount transfered – leaving open the possibility for increased selling pressure if more coins move off exchanges.
BTC/USD Above Support Level
Despite negative news this week, BTC/USD is currently trading above support between $21,500 and $21,950 – indicating that buyers may have an advantage over bears at present. Confirmation will arrive with consecutive daily closes above this level.
Coin Days Destroyed Metric Spikes
The large transfer of Bitcoin resulted in a noticeable spike in Glassnode’s coin days destroyed (CDD) metric which measures weighted movement based on when coins are last moved from an addresss. A CDD spike usually foreshadows potential price volatility – however some long-term investors may also move coins to leverage more gains on futures markets instead of selling off their holdings at once.
Takeaway
The US governments recent transfer of 1 billion worth of bitcoin has had minimal impact so far but traders should be aware that further transfers could cause increased selling pressure and lead to greater price volatilty ahead.