Bitcoin
BTC Price Drop – Who Is Really Selling Bitcoin?
Dan Burgin
Bitcoin ETF flows may not always affect the price of Bitcoin
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Bitcoin is experiencing a major correction despite high net flows from spot ETFs. Crypto analyst Willy Woo has shared your opinion on the recent drop in BTC price. In his recent post on X, he provides some insights into the current Bitcoin sell-off and why its price does not correlate with the positive momentum of the BTC ETF.
Who is selling?
Woo points out that while ETFs and institutions are actively buying BTC, focusing solely on ETF flows is a failure. The main sellers, according to Woo, are the “OGs” – original BTC holders. These early adopters hold significantly more BTC than all ETFs combined and tend to sell during all bull markets.
The chart reveals a recognizable pattern that appears during bull runs in each cycle.
Paper is everything
The introduction of paper BTC into futures markets since 2017 has significantly altered market dynamics. Paper BTC allows traders to purchase synthetic BTC without holding real BTC, which diverts direct demand from real BTC.
In the past, the price of Bitcoin rose because only long-time holders and miners sold BTC. However, the 2022 bear market was influenced by a flood of paper BTC despite minimal sales by spot holders. Woo notes that current conditions show periods where a rise in paper BTC does not lead to a price rally, highlighting the impact of synthetic BTC.
Woo argues that understanding BTC market dynamics requires analyzing on-chain data, derivatives data, and technical price actions.
Therefore, focusing only on buying ETFs is insufficient; A broader view is needed to capture the full picture of demand and supply.
About the author
Dan Burgin
Dan is an editor and news writer with 12 years of experience in finance and emerging technologies, with a strong focus on cryptography. Covering a wide spectrum of topics from fintech startups to AI, it provides an in-depth overview of the current state of the crypto market along with insights into its potential for future disruption.