The Bitcoin (BTC) market is experiencing uncertainty as the recovery of dormant currencies coincides with weak demand for the currency in the spot market. Data on the chain revealed that many long-held bitcoins have returned to circulation.
While this is usually a net positive for the value of the currency, it was met with low demand, which could add further downward pressure to the price of bitcoin.
In a post on X, Lookonchain noted that on Wednesday, a large Bitcoin whale withdrew 250 bitcoins from leading Binance exchange after six months of inactivity. This whale activity coincided with a sharp rise in the Bitcoin Consumer Life Scale, which tracks the movement of long-held currencies. On that day, the metric rose 1,026%, reaching 82.1 million – its highest level . in more than 90 days.
This rally is important because long-term currency holders rarely move their currencies. When they do, it often signals a shift in market trends. Historically, when bitcoin’s dormant currency returns to circulation, it is seen as a positive indicator of future price movements, indicating renewed activity from long-term strategic currency holders.
However, for a positive scenario to materialize, the movement of dormant currencies must coincide with strong market demand. If these previously dormant currencies return to trading during a period of weak demand, it could increase selling pressure and lower the price of Bitcoin – just like what we see in the current market.
The declining Chaikin Money Flow (CMF) Bitcoin Index highlights this weak demand. The Chaikin Money Flow (CMF), which tracks capital flows into and out of the market, is currently -0.13, below the zero line. This points to an exit of liquidity, with more traders selling their Bitcoin holdings, adding to the downward pressure.
Ethiopia exploits excess hydropower in Bitcoin mining
Ethan Vera, co-founder and CEO of Luxor Mining, recently embarked on a tour of state-approved mining companies in Ethiopia.
Vera shared on social media his first-hand version of the mining operations, revealing that the Ethiopian Electric Power Corporation (EEP) has allocated nearly 600 megawatts (MW) to Bitcoin miners working in the country.
Ethiopia’s current mining capacity translates to 2.25% of Bitcoin’s total hash rate, making it a prominent contributor from Africa. According to Luxor data, the country ranks fourth in the contribution of bitcoin mining hash rate, only after the US, Hong Kong and Asia.
Since China banned bitcoin mining operations in 2021, the small African nation has attracted an influx of Chinese miners. Thanks to abundant hydropower and surplus electricity generated from renewable resources, the Ethiopian government has made a concerted effort to tap its potential and establish itself as a Bitcoin mining hub.
Ethiopia turns to BTC mining to take advantage of hydroelectric power glut
Ethiopia is injecting investments into building infrastructure dedicated to bitcoin mining after it was legalized in 2022. Ethiopian Investment Holding Company (EIH), the government’s investment arm, has signed a $250 million Memorandum of Understanding (MoU) with Hong Kong-based Westdata Group. The partnership will see the Hong Kong-based company develop infrastructure for data mining operations and AI training.
According to data from the International Trade Association, Ethiopia boasts a proven generation capacity of 5,250 MW, with a staggering 90% of its electricity coming from clean hydroelectric power plants. However, despite this abundance, only half of the country’s population has access to electricity, resulting in a large surplus.
While the government plans to sell excess electricity to neighboring countries, the cost of building a transmission system to facilitate this is very high. Bitcoin mining has emerged as a viable solution
Negative Flows in Bitcoin ETF Despite Higher Prices
This article explores recent outflows in the Bitcoin Spot ETF market and the prevailing uptrend in Bitcoin prices, providing insights into the potential implications for investors.
In a worrying development, the Bitcoin Spot ETF reported large outflows of -$18.60 million yesterday. Leading this trend, the FBTC ETF faced the sharpest decline with total outflows of -$48.80 million, while the GBTC ETF closely followed with outflows of -$9.40 million. Interestingly, despite the prevailing negative sentiments, IBIT ETF distinguished itself With a positive inflow of $39.60 million, highlighting the stark divergence within the market.
The negative flow trends recorded since the beginning of October have raised investors’ concerns. On the first day of the month, the Bitcoin Spot ETF market faced large outflows of -$242.60 million. This continued with subsequent days which also reported negative inflows of -$52.90 million and -$54.20 million respectively. However, the market rebounded on October 4 and 7, showing moments of relief with positive inflows of +$25.60 million and +$233.80 million, respectively.
On October 4 and 7, the market rebounded with positive inflows of +$25.60 million and +$233.80 million, bringing moments of relief. However, That, as of yesterday, the market returned to a bearish position, amplifying doubts about the public health of Bitcoin investments.
Amid troublesome ETF inflows, the bitcoin market surprisingly recorded a modest rise of +1.5% over the past week. Bitcoin opened the month at $63,347 and faced pressure due to geopolitical tensions, notably the Israel-Iran crisis, which saw it fall to a low of $60,764 and then to $60,631. However, by October 3, bullish buyers began to reverse, and the price rose to $62,813 by October 6. At the moment, Bitcoin is trying to break through the opening price level set on the first of October
