The correlation between Germany-based investment fund ETC Group Physical Bitcoin (BTCE) and the Bitcoin price has shown a remarkable change recently.
According to a report shared by blockchain analysis platform CryptoQuant, BTCE began reducing its position on Bitcoin since the beginning of this year.
Past Correlation
According to historical data, there has been a correlation between BTCE and Bitcoin prices for many years. The fund, which started investing in Bitcoin in 2020, collected a total of 23,480 BTC. During the periods when BTCE increased its Bitcoin investments, the BTC price reached its peak in April 2021. However, when BTCE started to reduce its reserves, the BTC price also decreased.
This Time It's Different
According to CryptoQuant data, BTCE reduced its reserves from 27,980 BTC to 17,000 BTC as of January 2024. Despite this, the Bitcoin price is not reacting as it did in the past, despite BTCE reducing its Bitcoin position every day since the beginning of the year.
“Looking at the 30-day variance analysis, we observed that positive variations are associated with an increase in the BTC price and negative variations are associated with a decrease in the price,” analyst Joao Wedson said. However, he added, “The recent volatility has been out of the question; Bitcoin price has risen as the fund continues to reduce its position.”
“The fact that there has been no significant change in the Bitcoin price despite the constant depletion of BTCE reserves suggests that there may be a change in market dynamics,” Wedson commented.
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