Following an all-time high (ATH) of $99,800, Bitcoin [BTC] went through a downturn, reaching a local bottom of $92,584. Presently, Bitcoin is trading at $94,972. This represents a 3.47% drop within the last 24 hours.
Prior to this dip, Bitcoin had been on an upward trend, posting a 3.44% rise on a weekly basis and a substantial 41.61% increase on a monthly scale.
Hence, the sharp decrease subsequent to a historic surge raises uncertainties about the underlying drivers. According to insights from Glassnode, Long-Term Holders (LTHs) might be the influencing factor.
Who is offloading Bitcoin?
As per Glassnode’s evaluation, Bitcoin’s LTHs have stepped in to sell their holdings, amounting to a total of 366k BTC tokens, the highest level recorded since April. This likely exerted selling pressure, triggering a market retreat.
Consequently, buoyed by the escalating profit margins of recent weeks, LTHs have pivoted to cash out their gains.
Within this cohort of LTHs are groups holding between 6 million to 12 million BTC tokens. These entities have spearheaded the movement, shedding a minimum of 25.6k BTC tokens daily for profit.
Thus, this cluster offloaded their BTC holdings at an average cost base 71% lower than the prevailing price of $57.9k. With BTC soaring to an all-time peak of $99k, these LTHs reaped significant rewards from the surge.
From this perspective, the recent correction in the market stems from an upsurge in selling activities by LTHs.
Effects on BTC Charts?
In line with CryptoCrypto’s analysis, even though BTC faced a decline on daily charts, it retained a bullish stance. This recent setback provided an opportunity for both whales and individual traders to accumulate.
Initially, Bitcoin’s Whale Exchange Ratio dwindled over the previous week from 0.4 to 0.32. This indicates that while LTHs were divesting, whales persisted in accumulating BTC assets.
As a result, these whales refrained from actively transferring their BTC reserves to exchanges, a customary precursor to selling. This hints at an optimistic outlook among whales as they aim for sustained long-term gains.
Furthermore, Bitcoin’s Fund flow ratio spiked from 0.08 to 0.15, signaling a surge in buying pressure with more funds flowing in than out.
Ultimately, the rising Stock-to-Flow(SFR) reversion underscores this bullish sentiment. An uptick in SFR reversion signifies mounting market confidence in the value of BTC, often stemming from enhanced demand and adoption.
In essence, despite the profit-taking move by Bitcoin LTHs in the recent week, the bullish momentum of BTC persists. Hence, even with the LTHs engaging in selling activities, whales are accumulating assets, while the inflow of funds remains robust.
Given these conditions, BTC stands a chance to amass further gains. Consequently, BTC is expected to overcome the $99,000 resistance point where it encountered resistance thrice. Beyond this threshold, there are no substantial barriers, potentially paving the way for another ATH for the cryptocurrency.