Dormant BTC Wallets Trigger Market Shake

[umair]

Bitcoin recently faced a notable pullback after long-dormant wallets moved a staggering 32,000 BTC, worth nearly $3.93 billion. These coins had been untouched for 3–5 years, making this the largest dormant transfer observed so far in 2025. The sudden influx of previously inactive coins sparked a wave of profit-taking, shaking the market and causing short-term volatility.

The immediate effect was a drop of around 4% in Bitcoin’s price, dipping to approximately $120,000 from its all-time high near $126,000. This correction also triggered $620 million in crypto liquidations, primarily impacting long positions, highlighting how sensitive leveraged traders are to large, unexpected market movements. Interestingly, bulls quickly reduced liquidation losses from 74% to 55%, suggesting that some stability is returning and that strong support exists around current price levels.

This event demonstrates the influence that long-term holders—so-called “hodlers”—have on market dynamics. When dormant wallets re-enter circulation, they can significantly impact supply and demand, especially during periods of heightened market sentiment. For traders and investors, keeping an eye on on-chain activity is becoming increasingly important to anticipate potential price swings.

Despite the short-term turbulence, demand from institutional players, crypto ETFs, and corporate treasuries may absorb much of the reintroduced supply. This could pave the way for Bitcoin to stabilize and potentially rebound toward $130,000, depending on how long-term holders behave in response to market movements.

The lesson is clear: even coins that have been idle for years can suddenly influence market trends, making monitoring blockchain data critical for informed investment decisions.

How do you see this impacting market sentiment? Will dormant wallets continue to play a larger role in Bitcoin’s price swings, or is this just a temporary correction before the next rally?