Last week, Bitcoin witnessed a sharp decline in its value, losing more than 6%, amid clear shifts in market dynamics.
This decline was accompanied by a halt in the series of inflows towards Bitcoin exchange-traded funds (ETFs) in the United States, while outflows amounted to hundreds of millions.
Factors causing decline:
A recent report issued by “Bitfinex Alpha” indicated that the main reason for this decline is due to selling by long-term investors, whales, and miners via trading platforms and OTC transactions.
In bull markets, long-term investors tend to sell their holdings gradually, especially during periods of price consolidation, which is the case the market is currently witnessing.
This category of investors was the main contributor to the selling pressure seen in Bitcoin last week, as their selling significantly outweighed outflows from spot ETFs.
Besides long-term investors, whales have also been active in the market.
The top 10 flows to exchanges increased as a proportion of total flows, indicating that large amounts of Bitcoin were being deposited to exchanges via whale wallets, likely in preparation for a sale.
Additionally, Bitcoin miners' reserves saw a sharp decline last week, after a steady decline since before the mining reward split, suggesting that miners were selling their holdings to take advantage of rising prices.
Analysts assume that miners still face significant challenges in maintaining operational efficiency, especially after block rewards were reduced.
These miners are contributing to the current selling pressure, dropping their reserves to their lowest levels in four years.
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