Bitcoin Price Correction: $92K Drop Caused by Long-Term Hodlers, Not ETFs
Bitcoin took a dip recently, dropping over 5.6% in the last 24 hours to trade at $92,774. Contrary to initial beliefs, the price correction wasn’t triggered by institutional investors or exchange-traded funds (ETFs). Instead, it was long-term holders, also known as hodlers, who were behind the decline, according to Eric Balchunas, a senior ETF analyst at Bloomberg.
In a Nov. 25 post, Balchunas explained that the selling pressure ultimately came from within the community of Bitcoin holders. This correction follows a historic milestone for Bitcoin, with the cryptocurrency reaching over $99,000 on Nov. 22 for the first time ever. Some analysts still anticipate that Bitcoin will hit the $100,000 record high by the end of the month.
Onchain data shows that ETF flows have not been the main reason for the recent sell-off in Bitcoin. In fact, the ETFs have actually absorbed a significant portion of the selling pressure, predominantly from long-term holders. This indicates strong institutional demand that is propelling Bitcoin towards the $100,000 mark.
While some may see the correction as a setback, it could actually be a positive development for the longevity of Bitcoin’s current rally, especially given the increasing leverage in the crypto markets. Kris Marszalek, co-founder, and CEO of Crypto.com, previously warned that the market will require deleveraging before Bitcoin can surpass $100,000.
Despite the recent correction, Bitcoin’s estimated leverage ratio remains high. This suggests that there is still room for market adjustments before Bitcoin continues its upward trajectory. Overall, the recent price correction in Bitcoin seems to be a necessary step in maintaining a healthy market rally.
In conclusion, it’s important to note that while speculation may abound, the data points to long-term hodlers as the key players in Bitcoin’s recent price correction, not institutional investors or ETFs. This insight provides a clearer picture of the dynamics at play in the cryptocurrency market.
