Bitcoin’s According to Compass Point, high-ranking convicts are also joining in the crypto sell-off, which could signal the beginning of the end of the ongoing crypto recession.
Compass Point analyst Ed Engel said in a note on Tuesday that long-term holders (defined as those who have held a coin for at least 155 days, or about five months) were largely inactive from February to April, but have turned sellers in recent weeks.
In the past two days, they have sold about $2.4 billion in Bitcoin, “which has a significant impact on the balance of supply and demand for BTC,” Engel said.
He also highlighted that 26% of Bitcoin sold in the past 30 days were from investors who bought Bitcoin for $90,000 or more.
“This group of top buyers has shown strength throughout the bear market, but is finally capitulating as Bitcoin approaches new cycle lows,” he added. “Capitulation of top buyers is a very common theme in late-cycle bear markets. This gives us further confidence that the BTC bear market is in its late stages.”
Bitcoin is struggling to rally above its October record of $126,000 as uncertainty surrounding the Iran war continues to put pressure on prices. Meanwhile, the stock market broke new records. This disconnect has investors questioning the dominant view of Bitcoin, both that it is “digital gold” that should benefit from geopolitical uncertainty and that it trades like a high-beta tech stock.
On Tuesday, Bitcoin ETFs posted their 12th consecutive day of record net outflows, according to SosoValue. The total net assets of Bitcoin ETFs decreased from $107.8 billion on May 14 to $85 billion.
After Monday’s fear-based selloff, Bitcoin is down 10% since the start of the week. strategic A small sale of 32 coins triggered a long chain of liquidations, accelerating downward pressure.
Still, analysts say the Strategy sale is not a significant factor driving up Bitcoin prices.
“ETF flows are the primary driver of BTC price growth, explaining approximately 45% of the week-to-week return variation, and are a great way to track investor adoption/appetite,” Citi analyst Alex Saunders said in a note. “Recent capital flows have been negative, and the chances of passage of a US market structure bill, which in our view could renew investor interest, are diminishing.
“With no positive news on the regulatory front or any ‘ground subsidence’ concerns around fiscal conditions, we expect sentiment to remain lackluster, especially as the divergence from equity performance remains significant,” he added.
— CNBC’s Michael Bloom contributed reporting
