According to Foresight News, the continuous inflow of Bitcoin spot ETFs indicates a persistent buying trend in the market, with institutions also entering the fray. However, the market trend seems to be diverging, with a continuous bearish downturn. As we enter 2024, market participants are increasingly focusing on the inflow and outflow of Bitcoin spot ETFs, as if these data have become the key to understanding the real dynamics of the market.
The most important factors are total demand and supply. To understand who is selling, it's important to note that the OGs are selling. They own 10 times more BTC than all ETFs combined. They sell every time there's a bull market. This pattern has been around as long as the genesis block of Bitcoin.
To better understand this phenomenon, we can refer to the chart of coin age x number of coins sold. This chart reveals the selling behavior of OGs in the market and its impact on market trends.
We are currently in the 'modern era' of Bitcoin. Since 2017, 'Paper BTC' (referring to non-real BTC) has begun to flood the market. The futures market is also a key factor influencing market trends.
In the past, if you wanted to buy coins, you had to purchase real BTC. In recent years, you can buy so-called Paper BTC. This means that even those who don't have real coins can sell you that piece of paper.
Together, you have created synthetic Bitcoin.
This potential demand for BTC has been transferred to Paper BTC, which is satisfied by counterparties who have no BTC to sell and only have dollars to bet.
In the past, the exponential growth of Bitcoin prices was due to the small amount of selling from early holders and the small amount of newly mined coins sold by miners.
Now, you should pay more attention to the magic of 'Paper BTC'.
The bear market of 2022 was caused by the proliferation of 'Paper BTC', while in fact, real spot holders did not actually sell.
In the current bull market, I marked the periods when Paper BTC increased, but the price did not rise during these periods.
We are currently in such a stage.
Therefore, simply focusing on ETF purchases is not enough to fully grasp market trends. It is also necessary to pay attention to on-chain data, derivative data, technical price trends, and other factors.
All these factors have added to the complexity of demand and supply.
Analyzing them together is more like an art than a quantifiable science.
In this market full of variables, everyone is just making logical guesses.