Just like on Monday (9), the price of Bitcoin (BTC) registered losses again on Tuesday (10), with a drop of 0.8%. According to data from CoinGecko, the price of BTC reached $97,819 in the last 24 hours.
As a result, all cryptocurrencies in the Top 10 experienced losses again. Cardano (ADA) led the declines with a drop of 8.1%, followed by XRP with a decline of 6.5%. In the Top 100, losses also predominated, although the MOVE token stood out with an increase of 32%. Conversely, GALA fell by 13.4%, being the largest loss of the day.
Increasing short-term investors
For Fernando Pereira, one of the reasons behind the recent drop in BTC is the increase in purchases by short-term investors, meaning those who acquired BTC within a period of up to 155 days. This increase is measured through the Total Supply Held by Short-Term Holders [BTC] indicator, which has shown a sustained rise (orange line in the chart below).
“This group of investors tends to be more sensitive to price changes, which can influence the supply and demand dynamics in the market. Now, we have a significant amount of supply in the hands of these investors,” noted Pereira.
Currently, short-term investors hold 3.5 million BTC, surpassing the previous record of 3.2 million BTC. Interestingly, the previous record was also reached during a bullish period when BTC hit $74,000 in March.
“With this information, we must remain vigilant. Having so much supply in the hands of inexperienced investors who do not manage losses professionally can create selling pressure. These investors tend to sell in panic during a correction, which could intensify BTC's declines,” warned Pereira.
Also read: Bhutan sends 400 Bitcoin to an exchange platform and could realize gains
ETFs continue to accumulate
On the other hand, large long-term investors continue to accumulate BTC. For example, MicroStrategy added 21,550 BTC to its portfolio on Monday (9), and ETFs are also continuing to buy more BTC.
Among the funds, BlackRock's Bitcoin ETF (IBIT) chose to ignore market volatility. On Monday, the fund recorded inflows of $358 million, which is equivalent to more than 4,000 BTC, according to data from Farside Investors.
In addition to acquiring more BTC, the daily trading volume of IBIT increased yesterday, reaching $3 billion. This reflects high demand from institutional investors. Given that ETFs are the main avenue of exposure for this type of investor, this indicates strong long-term demand.
BlackRock's Bitcoin ETF has seen strong inflows, surpassing $3.1 billion in the last seven days. Since its launch, net inflows for IBIT have reached $34.7 billion, and the fund has surpassed the $50 billion mark, achieving a historic milestone.
To put it in perspective, the largest gold ETF (GLD) took approximately five and a half years to reach a similar milestone. This suggests that despite short-term corrections, the demand from large investors remains firmly established.
