- As the bear market continues, analysts have been evaluating what might be influencing the decline in the leading cryptocurrency, Bitcoin, and consequently, the crypto market.
- Data also indicates that during this period, 610,686 active addresses bought Bitcoin, 560,331 active addresses sent Bitcoin, and a total of 265,000 transactions took place.
- He noted that retail investors may have sold over the past few days as another factor that could have caused the decline.
A prominent cryptocurrency analyst has revealed that institutional investors seem to be entering an accumulation phase while examining the recent price drop in Bitcoin.
Why Did Bitcoin Experience a Price Drop?
As the bear market continues, analysts have been evaluating what might be influencing the decline in the leading cryptocurrency, Bitcoin, and consequently, the crypto market. This time, another cryptocurrency analyst explained the factors affecting Bitcoin’s price drop.
Bitcoin, in particular, dropped below $27,000 on October 12. Addressing this decline, crypto analyst Nick noted that there hadn’t been significant developments in the news apart from the recent release of US inflation data, which showed higher-than-expected increases in the Consumer Price Index (CPI). He then delved into essential on-chain metrics that could affect Bitcoin’s price. According to the data he examined, there were 903,210 active addresses in the past 24 hours.
The data also showed that during this period, 610,686 active addresses bought Bitcoin, 560,331 active addresses sent Bitcoin, and a total of 265,000 transactions occurred. However, what’s even more intriguing is the fact that 48.7 million addresses existed, but only 23 million of them held BTC.
Nick emphasized that these figures provide a perspective on the adoption rate of Bitcoin. Assuming that most Bitcoin addresses held BTC could be quite misleading; in reality, less than half of them had BTC.
Institutional Investors Spring into Action
He noted that another factor that might have caused the decline is that retail investors may have been selling off in recent days. However, the positive aspect Nick highlighted is that these sales indicate that institutional investors are accumulating again since they had previously sold their tokens to these retail investors.
He also pointed out the existence of 108 wallets holding over 10,000 BTC. These wallets, referred to as the “main manipulators” of Bitcoin’s price by Nick, have exhibited a similar selling tendency in the market, as these wallets decreased by 8.47% in the last 180 days, implying they sold “aggressively.”
Nick highlighted that this trend extended until April 2023 (the peak of accumulation for these wallets) and emphasized that the analysis suggests Bitcoin’s drop indicates a bigger picture rather than immediate factors.
Despite this drop and the amount of liquidation that took place, Nick remains optimistic that Bitcoin can close this bear market in the green. It is reported that October has been one of the best-performing months for Bitcoin in the last five years.
