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BTC Price Fall: Who Actually Sells Bitcoin?
Dan Burgin
Bitcoin ETF flows may not always influence the price of Bitcoin
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Bitcoin is experiencing a major correction despite high net inflows into spot ETFs. Crypto analyst Willy Woo did it shared his opinion on the recent drop in BTC price. In his recent post on
Who sells?
Woo points out that while ETFs and institutions are actively buying BTC, focusing solely on ETF flows is misguided. The main sellers, according to Woo, are the “OGs,” or the original holders of BTC. These early adopters own significantly more BTC than all ETFs combined and tend to sell during each bull market.
The chart reveals a recognizable pattern that manifests itself during bull runs in each cycle.
Paper is everything
The introduction of paper BTC through futures markets since 2017 has significantly changed market dynamics. Paper BTC allows traders to purchase synthetic BTC without holding actual BTC, which diverts direct demand from real BTC.
In the past, the price of Bitcoin increased because only long-time holders and miners sold BTC. However, the 2022 bear market was impacted by a surge in paper BTC, despite minimal selling 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 to understand BTC market dynamics you need to analyze on-chain data, derivatives data, and technical price action.
Therefore, focusing solely on buying ETFs is not enough; a broader view is needed to grasp the full picture of supply and demand.
About the author
Dan Burgin
Dan is a news editor and writer with 12 years of experience in finance and emerging technologies, with a strong focus on cryptocurrencies. Covering a broad spectrum of topics, from fintech startups to artificial intelligence, he provides an in-depth overview of the current state of the cryptocurrency market, along with insights into its potential for future disruption.