- The crypto market faced significant turbulence last week, with Bitcoin (BTC) experiencing a dramatic drop of over 6% in value.
- U.S. spot Bitcoin exchange-traded funds (ETFs) saw a reversal in their 20-day inflow streak, leading to significant outflows.
- According to Bitfinex’s latest Alpha report, this sell-off was driven by long-term holders, whales, and miners.
Stay informed about the latest shifts in the crypto market. Discover why Bitcoin’s value plummeted, and understand the roles of key market players such as long-term holders, whales, and miners.
Selling Pressure From Long-term Holders (LTHs) and Whales
The recent market sell-off is primarily attributed to long-term holders, who typically unload their holdings during market consolidations. Their actions were a major contributor to the recent decline.
The Hodler Net Position Change metric, which measures the monthly changes in long-term investors’ Bitcoin positions, has indicated consistent selling over the past nine days.
Additionally, whale activity has surged. The proportion of top ten BTC inflows into exchanges has risen, signaling large deposits likely intended for sale.
This data underscore the critical influence of long-term holders and whales on Bitcoin’s market dynamics. Even though the volume of selling is less than earlier in the year, their decisions significantly impact market liquidity and price movements.
Miner Reserves Deplete
Miner Bitcoin reserves saw a considerable decline last week, continuing a downward trend that began prior to the recent halving event.
“The peak BTC price in March 2024 correlated with a notable drop in miner reserves. Miners were selling off to capitalize on high prices and prepare for the investment needed for post-halving operational upgrades,” Bitfinex explained.
Analysts suggest that miners are grappling with reduced block rewards, contributing to the increased selling pressure. Miner reserves have now hit their lowest levels in four years.
Conclusion
The recent sell-off in the crypto market highlights the significant roles of long-term holders, whales, and miners. Their decisions can lead to substantial shifts in market dynamics, influencing liquidity and price movements. As we observe these trends, it’s critical to stay informed and anticipate future market changes.
