Significant swings and selling pressure have shaken Bitcoin in recent weeks.
Pressure to Sell Bitcoin Accelerates
In the last two weeks, long-term Bitcoin holders sold $1.2 billion. The market is under more strain as a result of this significant sell-off.
The CEO of the blockchain analytics company CryptoQuant, Ki Young Ju, asserts that over-the-counter transactions are the only way to absorb this kind of cash in sell-side liquidity. If not, brokers may add Bitcoin to exchanges, which would have even more effect on the market.
A portion of the sell-off has also come from early Bitcoin miners. This year, they have made around $550 million while the price of Bitcoin has fluctuated between $62,000 and $70,000. The downward pressure on the price of Bitcoin has increased due to this trend.
Remarkably, on-chain research points to a connection between the recent Bitcoin halving and this “rare” miner surrender. Weaker miners are eliminated by this process, which temporarily increases the amount of Bitcoin sold. The market dips when these miners leave, but it can also rise again.
On-chain expert Willy Woo, however, insists that before a positive trend can continue, this phase needs the clearance of open interest in futures markets.
Analysts at the AI-driven analytics platform Spot on Chain emphasized ongoing negative net flows in Bitcoin ETFs, which added to the market’s difficulties.
The net outflow of Bitcoin ETFs hit $152 million on June 18, 2024. At $714 million, this is the fourth day in a row that net inflows have been negative. The substantial withdrawals from Grayscale and Fidelity contributed to the overall pessimistic attitude.
Lastly, experts at IntoTheBlock, a data science startup, observed that the hype around ordinals and Runes earlier this year caused a jump in Bitcoin transactions. On the other hand, there hasn’t been a noticeable inflow of new users to coincide with the rise in use and whale activity.
Bull markets in cryptocurrencies are usually driven by a general excitement for Bitcoin. However, despite Bitcoin’s early success, “retail user growth is lacking,” according to experts at IntoTheBlock.
In fact, the quantity of new Bitcoin users has fallen to a level not seen since the weak market of 2018, even lowering to a multi-year low. The existing market dynamics’ durability is called into doubt by the absence of increase in retail investor numbers.
