Whales, miners and long-term holders are responsible for the fall of Bitcoin, according to Bitfinex – DiarioBitcoin
By Hannah Perez
More than outflows from spot Bitcoin ETFs, whales, hodlers and miners are what are putting downward pressure on the price of Bitcoin, Bitfinex analysts noted.
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- Bitcoin has fallen more than 4% in price in the last week, and ETFs are not the reason
- US Bitcoin Spot ETFs Recorded Nearly $600 Million Outflows Last Week
- Bitfinex Analysts Say Miners, Hodlers and Whales Are Putting Downward Pressure on the Market
Bitcoin (BTC) has lost the key USD $70,000 mark entering bearish territory over the last week.
The cryptocurrency market’s price pullback came amid key economic indicators in the US and after the Federal Reserve (FED) suggested it could continue to delay an imminent interest rate cut to the end of the year.
Exchange-traded funds (ETFs) Bitcoin spot securities traded in the US market recorded their worst capital outflows since April amid this scenario. In particular the 11 ETFs of Bitcoin spot saw withdrawals of USD $580 million last week, noted CoinShareswhich could suggest bearish sentiment among investors.
However, most of the downward price pressure does not appear to come from ETF sales, according to analysts at Bitfinex, who have suggested that it is instead miners, whales and long-term holders who are responsible for the reversal. In this regard, they wrote in their most recent report, published this Monday:
On-chain metrics reveal that the real selling pressure is not coming from ETF investors but from long-term holders, whales and miners. The Hodler Net Position Change metric, which measures whale holdings, has shown consistent negative values over the past nine days.
Whales and hodlers are bigger than ETFs
While ETF flows can provide insight into investor sentiment Bitcointhis metric appears to be more a result of price changes than predictive of market direction, according to the authors.
In this regard, they believe that it would be valuable to closely observe whales and long-term holders, two groups that “They control more BTC than ETFs” and “They have clearly put pressure on the market“.
Citing chart data CryptoQuantthe analysts of Bitfinex They noted that long-term holders (LTH) and whales have been doing much of the selling, both on exchanges and through over-the-counter trading.
“Historically, long-term holders tend to sell their holdings gradually during bull markets, and especially when the market enters a consolidation phase, like the one we are currently seeing.“, they wrote.
A selling signal from these groups is the inflows that the top ten cryptocurrency exchanges have been recording over the past few weeks. Typically, large deposits of Bitcoin on trading platforms through whale addresses encourage that Bitcoin It is being prepared for sale, they explained.
Miners of Bitcoin They also exert downward pressure
The authors said another useful metric to illustrate whale movement —a term that refers to large investors— is he Coinbase Premium Indexan index measures the percentage difference between the price of Bitcoin on the platform Coinbase Pro and the average price on other major exchanges.
“When this percentage difference is low or shows a discount on Coinbase, it may suggest strong selling pressure from US investors on the platform. This observation is particularly important because many miners and ETF issuers are active on Coinbase, and this metric has been negative throughout the previous week.“, they pointed out.
Lastly, the team Bitfinex He mentioned that another key indicator is the inverse relationship that exists between the price of BTC and miners’ reserves. Miners’ reserves tend to decrease when prices rise, suggesting that miners are selling their coins to profit from higher prices.
This was particularly seen during March, when miners’ reserves fell to multi-year lows as Bitcoin It reached a new historical maximum of USD $73,000. The exit trend was also related to the fourth halving and the need for miners to generate income before facing a block reward cut.
However, this metric has continued to decline, suggesting that the miners of Bitcoin They continue to sell their coins post-halving event and even though prices have dropped.
That said, with miners’ reserves approaching four-year lows, selling pressure from this group could be reaching a critical low.
Optimism due to macro indicators
Despite this panorama, analysts of Bitfinex They remain optimistic about macro indicators. In this sense, they mentioned the latest reading of the consumer price index (CPI) in the US and a more relaxed labor market as “factors suggest that a first rate cut in September, followed by a further cut in December, is still quite plausible“.
Last Wednesday, the FED’s Federal Open Market Committee (FOMC) opted to keep rates unchanged at a range of 5.25% and 5.50% just as the CPI report showed that inflation remained persistent in 3.3% annual for May.
The authors were also optimistic about the imminent debut of the first ETFs of Ethereum spot in the US after Securities and Exchange Commission Chairman Gary Gensler hinted at possible approval in the coming months.
BTC is down 4.5% on the week and is trading around $66,800 at press time, down 10% from March’s all-time highs.
Article by Hannah Estefanía Pérez / DailyBitcoin
Picture of Unsplash
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