The recent price correction in the Bitcoin market has sparked discussions about the factors driving the sell-off.
The money is great, but the mission is even greater. #Bitcoinpic.twitter.com/UmWoUgV8fX
— Michael Saylor⚡️ (@saylor) November 25, 2024
While some initially speculated that institutional investors and ETF flows were responsible, onchain data suggests that long-term holders have been the primary sellers. As of Nov.
26, Bitcoin was trading at $92,774, having fallen over 5.6% in the past 24 hours.
Year to date, $MSTR's treasury operations delivered a BTC Yield of 59.3%, providing a net benefit of ~112,125 BTC to our shareholders, or ~341 BTC per day. At $100K per BTC, that would equate to $11.2 billion for the year so far, or $34.1 million per day.
— Michael Saylor⚡️ (@saylor) November 25, 2024
Eric Balchunas, a senior ETF analyst at Bloomberg, emphasized that the sell-off was driven by long-term holders, stating, “The call is coming from inside the house, it’s long-term hodlers.”
The correction followed Bitcoin’s historic milestone of breaching $99,000 on Nov. 22.
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Despite the recent drop, some analysts still expect Bitcoin to record new highs before the end of the month.
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Long-term holders behind bitcoin correction
Onchain data and market insights reveal that ETFs have absorbed a significant amount of selling pressure from long-term holders.
Kyle du Plessis, a crypto trader and technical analyst, mentioned that “Long-term Bitcoin holders sold 128K $BTC, but U.S. spot ETFs absorbed 90% of the selling pressure. Strong institutional demand is fueling BTC’s rally, bringing it closer to the $100K milestone.”
The correction, although impactful, may be beneficial for the market’s sustainability, given the increasing leverage in crypto markets. Kris Marszalek, the co-founder and CEO of Crypto.com, had previously warned about potential market overheating leading up to $100,000.
Bitcoin’s estimated leverage ratio across all cryptocurrency exchanges stood at 0.24, a high last seen in August 2023, according to CryptoQuant data. This indicates that the current correction did not trigger an immediate wave of deleveraging. Analysts suggest that the correction might position Bitcoin for a more stable path towards reaching higher price milestones in the future.
As the market navigates through this period of turbulence, both analysts and investors will be keen to see how Bitcoin and the broader crypto market respond in the coming days.
