Originally published on: November 26, 2024
Bitcoin has seen a significant price drop of over 5.6% in the last 24 hours, with prices reaching $92,774. Contrary to initial beliefs, this correction is not due to institutional investors or exchange-traded funds (ETFs), but rather long-term holders, also known as hodlers.
According to Eric Balchunas, a senior ETF analyst at Bloomberg, data suggests that it is the actions of these long-term holders that have caused the recent decline in Bitcoin’s price. This correction follows Bitcoin reaching its all-time high of over $99,000 on November 22.
While some experts predict that Bitcoin will surpass the $100,000 mark by the end of the month, on-chain data shows that ETF flows have not been the main drivers of sell pressure for Bitcoin. Instead, ETFs have absorbed the selling pressure coming from long-term holders, as indicated by crypto trader and technical analyst Kyle du Plessis.
This correction may actually be beneficial for the sustainability of Bitcoin’s current rally, especially considering the increasing leverage in the crypto markets. Kris Marszalek, the co-founder and CEO of Crypto.com, had previously warned that the crypto market would need to deleverage before Bitcoin could reach $100,000.
Despite the correction, Bitcoin’s estimated leverage ratio remains high, suggesting that immediate deleveraging may not occur just yet. This data challenges the initial belief that institutional investors and ETFs were to blame for Bitcoin’s recent price drop.
For more insights into the world of DeFi and cryptocurrency, subscribe to the Finance Redefined newsletter for weekly updates on the latest developments and opportunities in the financial market. Stay informed and make confident decisions in the ever-evolving crypto space.
