If Bitcoin ETFs Are Buying, Who Is Selling? Analyst Answers


Bitcoin
has
been
struggling
even
though
spot
exchange-traded
funds
(ETFs)
have
been
bought.
Here’s
why,
according
to
this
analyst.

Bitcoin
Has
Been
Seeing
A
Rise
In
“Paper
BTC”
Recently

In
a
new

thread
on
X,
analyst
Willy
Woo
has
talked
about
why
BTC
has
seen
bearish
momentum
recently
despite
the
buying
pressure
from
spot
ETFs
and
institutional
entities.

First,
the
analyst
has
explained
a
source
of
spot
selling
pressure:
the

long-term
holders
(LTHs).
The
LTHs
refer
to
the
HODLers
of
the
market,
who
tend
to
keep
their
coins
dormant
for
long
periods.

How To Get Free Crypto  

These
investors
rarely
sell,
and
the
timing
of
when
they
participate
in
selling
appears
to
have
followed
a
pattern
throughout
history.
Below
is
a
chart
that
shows
the
data
for
the

Coin
Days
Destroyed
(CDD)
metric
that
reveals
this
trend.

The value of the indicator appears to have seen a large spike just a while ago | Source: @woonomic on X

The
CDD
keeps
track
of
the
number
of
coins
that
investors
are
moving
on
the
blockchain
daily
and
weighs
it
against
the
age
of
said
coins.
This
means
that
when
the
CDD
spikes,
many
dormant
coins
have
just
broken
their
silence.

As
is
visible
in
the
graph,
the
Bitcoin
CDD
had
seen
a
huge
spike
earlier
in
the
year
when
the
asset’s
price
had
set
a
new
all-time
high
(ATH).
Naturally,
this
suggests
that
the
LTHs
potentially
took
part
in
a
large
amount
of
selling
during
this
rally.

It’s
also
apparent
in
the
chart
that
similar
spikes
in
the
indicator
had
also
occurred
in
the
middle
of
the
2017
and
2021
bull
runs.
Thus,
this
latest
selloff
from
the
LTHs
isn’t
something
out
of
line
with
what
has
historically
been
observed.

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The
other
culprit
behind
why
the
asset’s
recent
run
has
slowed
down
could
be
paper
Bitcoin.
“Paper
BTC”
basically
refers
to
the
derivatives
products
that
don’t
involve
the
investor
owning
real
tokens
of
the
cryptocurrency.

As
the
analyst
notes:

In
the
old
days,
BTC
would
go
on
an
exponential
run
because
the
only
sellers
was
a
trickle
from
the
OGs
and
an
even
smaller
amount
from
miners
with
their
newly
mined
coins.
Today
the
magic
of
paper
BTC
is
what
you
want
to
watch.

The
chart
below
shows
the
Bitcoin
inventory
sitting
on
exchanges
in
recent
years.

Looks like the value of the total inventory has slightly increased recently | Source: @woonomic on X

As
is
visible
in
the
above
chart,
the
spot
inventory
of
the
asset
has
only
shown
phases
of
downward
and
sideways
trends
during
the
last
few
years,
meaning
that
the
exchanges
have
not
been
receiving
any
significant
net
deposits.

However,
the
spot
plus
paper
BTC
inventory
did
see
a
rise
during
the
2022
bear
market.
This
increase
implied
that
paper
BTC
was
being
minted
rapidly,
as
the
spot
inventory
was
only
consolidating
in
the
same
period.
Woo
notes
that
this
suggests
paper
BTC
dictated
the
bear
market.

The
analyst
has
marked
the
instances
where
paper
BTC
rose
during
this
current
bull
market
in
the
graph.
It
seems
that
every
time
paper
BTC
has
gone
up,
the
rally
has
slowed.

FreeBitcoin Banner  

The
inventory
of
paper
BTC
has
been
increasing
again
recently,
which
may
explain
why
Bitcoin
has
been
unable
to
establish
bullish
momentum.

BTC
Price

Bitcoin
recovered
above
the
$66,000
mark
during
the
weekend,
but
the
asset
has
retreated
today
as
its
price
is
down
to
$65,300.

The price of the coin seems to have slid down over the last few days | Source: BTCUSD on TradingView

Featured
image
from
Dall-E,
woocharts.com,
chart
from
TradingView.com

Go to Source
Author: Keshav Verma


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