This Unexpected Detail That Caused The Drop In Bitcoin
BTC
ETF
ETF
The recent decline in the price of bitcoin, reaching $92,000, has surprised many observers. Contrary to speculations, it is not the ETFs or institutional investors who are responsible, but long-term holders (hodlers), revealing a strange behavior from them.
Bitcoin: A price correction to $92,000 triggered by Hodlers
The price of BTC has dropped by more than 5.6% in the last 24 hours, reaching $92,774 at 8:52 AM UTC on November 26. Contrary to what investors thought, ETF flows were not the main cause of the selling pressure on Bitcoin. This significant drop has rather been attributed to sales from long-term holders who decided to realize their gains. This created significant selling pressure in the Bitcoin market.
Eric Balchunas, senior ETF analyst, explained this: “I see a lot of people on CT (Crypto Twitter) perplexed/frustrated to see Saylor buy $5 billion of bitcoin without the price going up. It’s the same thing I sometimes hear about ETFs after big flows. Here’s data showing what I’ve been saying for a long time: the call comes from inside the house, it’s the long-term hodlers.“
Ryan Lee, chief analyst at Bitget, disagrees. In his opinion,
This decline is mainly due to the profit-taking behavior of major US institutions in the face of the upcoming holiday. In addition, long leveraged positions above $3.40 billion face liquidation risks, which may further exacerbate price volatility.
The complex dynamics of the crypto market
This situation highlights the complex dynamics of the crypto market, where price movements are not always dictated by large institutions or new financial products like ETFs. The hodlers, who hold their assets for long periods, play a crucial role in the stability and volatility of the market, especially concerning Bitcoin.
In conclusion, while ETFs and institutional investors are often blamed for market fluctuations, it is essential to recognize the significant impact of hodlers. Their buying or selling behavior can trigger major price corrections, such as the one recently observed for Bitcoin. At the time of writing, BTC has fallen further and is trading at around $91,700.
