As a seasoned researcher with over a decade of experience in the crypto market, I’ve seen more than my fair share of price swings and speculation. The recent drop in Bitcoin’s price has been an interesting turn of events, especially given the initial speculation about institutional investors being the primary culprits. However, after digging through the data, it seems that the long-term holders, or ‘hodlers’, are actually behind this correction.
The latest decline in Bitcoin’s price seems to be more connected with long-term holders, rather than large institutional investors, contrary to the initial assumptions.
As I examine the current state of the digital currency market, it’s apparent that Bitcoin (BTC) has experienced a decrease of approximately 5.6% in the last 24 hours. At present, as I write this at 8:52 am UTC on Nov. 26, its value stands at $92,774 according to CryptoMoon data.
Actually, it was not the financial institutions or ETFs that led to Bitcoin’s decrease in value. Instead, the evidence suggests that the decline is largely due to long-term investors, often referred to as “hodlers,” according to Eric Balchunas, a senior analyst at Bloomberg.
The analyst wrote in a Nov. 25 X post:
“I see a lot of CT baffled/frustrated as to how Saylor can buy $5b of BTC but price doesn’t move up – which is same thing I hear sometimes about ETFs after big flows. Here’s data showing what I’ve long been saying: the call is coming from inside the house, it’s long-term hodlers.”
Shortly after reaching an all-time high monthly close at $99,000 on November 22, Bitcoin has sparked anticipation among some analysts who believe it may surpass its previous record high of $100,000 by the end of this month.
Bitcoin hodlers caused BTC correction to $92,000: Data
Onchain data reveals that ETF flows haven’t been the primary causes of sell pressure for Bitcoin.
Furthermore, Exchange-Traded Funds (ETFs) have taken on a substantial portion of the selling pressure, as per a Nov. 24 blog post by Kyle du Plessis, a long-term crypto holder, trader, and analyst.
“Long-term Bitcoin holders sold 128K $BTC, but U.S. spot ETFs absorbed 90% of the selling pressure. Strong institutional demand is fueling BTC’s rally, bringing it closer to the $100K milestone.”
On the other hand, making the necessary adjustments might prove advantageous for the continuation of Bitcoin’s surge, given the increasing debt in the cryptocurrency market.
12th November marked a statement by Kris Marszalek, the co-founder and CEO of Crypto.com, suggesting that the cryptocurrency market needs to go through a process called deleveraging before Bitcoin can potentially reach a value of $100,000.
Contrarily to expectations, the correction did not lead to an instant reduction of borrowed funds. As per CryptoQuant’s data, Bitcoin‘s leverage ratio across all cryptocurrency exchanges was at 0.24, which is the highest since August 2023.
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2024-11-26 13:28