Bitcoin (BTC) has fallen more than 6% in seven days, diverging from its generally positive correlation with the Nasdaq Composite Index.
The Federal Reserve has signaled only one interest rate drop for the rest of the year, which normally affects asset classes such as cryptocurrencies. This ruling may have had a detrimental impact on market sentiment for Bitcoin.
Markus Thielen from 10x Research explains that ongoing selling in a market at a specific price level is driven less by external events or narratives and more by the perception among large sellers that prices have become overvalued at that point.
Thielen notes that the November 2021 peak near $70,000 represents a key threshold where long-term Bitcoin holders are inclined to sell, as they see it as an opportune moment to cash out at high prices.
Notably, a wallet that had been idle since 2018 transferred 8,000 BTC (worth more than $500 million) to the cryptocurrency exchange Binance. Such moves are frequently interpreted as precursors to significant sales, implying that long-term holders may be taking profits at current prices.
Data from CryptoQuant indicates a decline in BTC inactive for 12 months and two years, suggesting holders are cashing out near record highs.
Ilan Solot of Marex Solutions notes that addresses inactive for 1-2 years have been selling since prices peaked, offsetting accumulation by longer-term holders. Thielen highlights that 1.8 million BTC inactive for a decade may include Satoshi’s 1.1 million BTC, predicting Mt. Gox holders will convert BTC to fiat by late 2024.
Mt. Gox, the infamous crypto exchange that collapsed in 2014, is set to distribute 142,000 BTC and 143,000 BCH to creditors by October/November 2024. This distribution could significantly impact the market if creditors decide to sell their assets upon receiving them.
Bitcoin miners have increased their selling activity. Marathon Digital, for example, sold 1,400 Bitcoin for $98 million this month alone. Furthermore, miners reportedly sold over 1,200 BTC in a single day recently through over-the-counter desks, indicating significant selling pressure in this sector.
The hashrate, which measures the computational power committed to the Bitcoin blockchain, has also dropped recently. This decrease, from 622 exahashes per second (EH/s) to 599 EH/s, indicates miner capitulation or reduced mining activity due to a variety of variables such as regulatory pressures and operating costs.
Also Read: Bitcoin Whales Grab $1.4 Billion in a Single Correction Day
