Bitcoin Price Pressured by Whales, Long-term Holders, and Miners
Bitcoin's stability is being tested due to continuous selling from influential investors like whales, long-term holders (LTHs), and miners. Last week, Bitcoin's price dropped by 4.4%, as noted in the latest "Bitfinex Alpha" report.
Major Sellers: Long-term Holders and Whales
Long-term holders (LTHs) are known for selling during bull markets and periods of price consolidation. Recently, they played a significant role in the market's downturn. Although their selling was not as massive as in past events, it still highlighted their market influence.
On-chain metrics show that LTHs are the main contributors to the recent sell-off. This selling activity is tied to unwinding basis arbitrage trading mentioned in the previous week's Bitfinex Alpha report. The "Hodler Net Position Change" metric, which tracks the monthly changes in LTH positions, has turned negative, indicating they are selling their Bitcoin.
Increased Whale Activity
Another important trend is the rise in the top 10 inflows to exchanges. This suggests that whales, large Bitcoin holders, are also selling more. This trend usually happens before a price drop. Despite this, Bitcoin's price has stayed relatively stable over the past three months, likely due to strong demand for spot ETFs. However, ongoing selling is limiting potential price increases.
Coinbase Premium Index
The Coinbase Premium Index is another indicator showing strong selling pressure from U.S. investors on Coinbase Pro. This index, which measures the price difference between Coinbase Pro and other major exchanges, has consistently shown a negative percentage difference due to selling pressure.
Miners Selling Bitcoin
An inverse relationship has been observed between Bitcoin's price and miner reserves. When Bitcoin's price peaked around March 2024, miners started selling their reserves to capitalize on high prices and prepare for the upcoming halving event. Now, miner reserves are nearing a four-year low, suggesting this group may soon hit a critical selling point, possibly affecting future market dynamics.
In summary, Bitcoin's recent price drop has been influenced by selling from long-term holders, whales, and miners. These key players are reshaping the market, and their actions will be vital in determining Bitcoin's short-term and long-term price movements.
