Bitcoin has experienced a 6% drop over the past week, diverging from the usual positive correlation it has with the Nasdaq Composite Index, which reached an all-time high. The decline in BTC price can be attributed to various crypto-specific factors, such as profit-taking by long-term holders and increased selling by miners.
Markus Thielen, the founder of 10x Research, highlighted how long-term holders may be cashing out at the November 2021 all-time high of nearly $70,000, influencing the current sell-off. Additionally, the movement of 8,000 BTC from an inactive wallet to the exchange Binance suggests a potential impending sale, reflecting a broader trend of profit-taking in the market.
Data from CryptoQuant indicates a decrease in the number of BTC inactive for at least 12 months or two years, signaling that holders are taking profits as the bitcoin price remains near its peak. Ilan Solot, co-head of digital assets at Marex Solutions, noted that this trend is offsetting accumulation by long-term holders.
Looking ahead, Thielen pointed out that approximately 1.8 million BTC have not moved for over a decade, including potentially Satoshi Nakamoto’s 1.1 million BTC. He also highlighted the upcoming distribution of bitcoin by Mt. Gox creditors, which could have a significant impact on digital asset prices.
Another factor contributing to BTC’s price weakness is the increased selling by miners. Marathon Digital, a listed miner, sold 1,400 bitcoin worth $98 million this month, while overall miner selling volume spiked on June 10. The decline in hashrate, falling from 622 EH/s to 599 EH/s, further suggests miner capitulation.
In conclusion, the current dynamics in the crypto market point to a combination of profit-taking by holders, upcoming distribution events, and increased miner selling as key factors influencing Bitcoin’s price movement. Stay informed and monitor these developments to navigate the evolving landscape effectively.
