Before its recent rebound, the downturn in Bitcoin’s price was attributed to several factors that significantly hampered its performance. However, one of these factors stood out the most during the downtrend, and that was heightened selling pressure in the market.
Bitcoin Was Hampered By Selling Pressure
During the Bitcoin downside performance, speculations about the factors fueling this negative move swell across the community. However, CW, a market expert and verified author at the CryptoQuant platform, has shed light on the matter, attributing it to waning investors’ sentiment in the market.
In the report shared on the social media platform X (formerly Twitter), CW highlighted that the recent decline in Bitcoin was largely led by the Futures Market, which is hovering in negative territory. Increased short positions, changes in financing rates, and elevated leverage all suggest that derivatives traders are mostly responsible for determining the direction of prices.
According to the expert, the net selling volume in the spot market was approximately half of what was recorded in buying volume. However, a massive wave of selling pressure unfolded in the futures market, causing BTC to return to its previous price. This imbalance caused the bulls to experience a difficult environment as a result of every attempt at recovery being met with increased sell-side intensity.
Bitcoin’s large investors and whales have also been caught up in this imbalance. These key investors continue to hold on to their spot BTC and liquidating high-leverage long bets due to the drop in the futures market. In addition to holding their spot BTC, the cohort is absorbing volume from retail investors who are steadily selling their positions out of fear.
BTC Whales Are Taking Their Coins Out Of Crypto Exchanges
Alphractal, an advanced investment and on-chain data analytics platform, has published a report that offers a more in-depth view of Bitcoin whales. Over the past 30 days, large investors have absorbed about 270,000 BTC from crypto exchanges, triggering a notable drop in BTC reserves on these platforms.
Following the recent absorption by whales, exchange reserves have reached a 7-year low, signaling a longstanding behavior of moving coins into self-custody wallets. As of Monday, only 2.2 million BTC, representing about 5.88% of the total supply, was present on crypto exchanges across the sector. The last time exchange reserves were this low was in the 2018 market cycle.
Meanwhile, wallet addresses holding at least 1,000 BTC have been amassing over the past month. During the short period, these investors have quietly scooped up nearly 1.4% of the total supply of Bitcoin. While whales are displaying aggressive buying behavior, retail holders have remained quiet.
Alphractal simply calls this trend an example of an early accumulation until it is no longer quiet. In the meantime, this moment is one that is closely watched in the crypto market due to the ability of whales to shape liquidity and price direction, making this trend particularly significant for its next potential move.
Featured image from Pngtree, chart from Tradingview.com
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