30s Summary

The recent decline in Bitcoin’s value has been attributed to long-term hodlers, according to Bloomberg’s senior ETF analyst, Eric Balchunas. Following its recent high of $99,000, Bitcoin’s price dropped by over 5.6% to $92,774. Despite this, big investors and ETFs were not major contributors to the selling pressure. On the contrary, US spot ETFs absorbed most of the 128,000 Bitcoin sold by hodlers and pushed Bitcoin’s value towards $100,000. Crypto.com CEO, Kris Marszalek, suggests that the dip could aid Bitcoin’s rally if it leads to a reduction in leverage across cryptocurrency markets.

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The recent drop in Bitcoin’s price is thought to be caused by long-term savers and not big investors, even though some people had originally thought otherwise. Bitcoin’s price fell more than 5.6% to $92,774 in the last 24 hours.

Despite this, it looks like it was not big financial institutions or exchange traded funds (ETFs) that caused this fall. Rather, people who’ve been holding Bitcoin for a long time, also known as hodlers, seem to be the ones to blame. This info comes from Eric Balchunas, a senior ETF analyst at Bloomberg.

He posted to say that everyone seems confused as to why the price of Bitcoin doesn’t go up, even when someone buys huge amounts, like $5 billion. But, it turns out it’s because of the kedlers. This price drop happened shortly after Bitcoin hit its highest monthly value in history, touching $99,000 on Nov. 22 for the first time. Some experts still reckon Bitcoin could pass the $100,000 mark before this month is out.

Data shows that ETFs weren’t the main reason for Bitcoin pressure selling. On the contrary, ETFs helped to reduce a lot of the selling pressure created by long-term hodlers. Crypto trader and technical analyst Kyle du Plessis says that long-term Bitcoin holders sold 128,000 Bitcoin, but US spot ETFs managed to absorb nearly all of this selling pressure. This has led to strong demand from big investors, pushing Bitcoin closer and closer to $100,000.

This dip in Bitcoin’s price could actually be good for its rally, considering the levels of leverage seen in crypto markets at the moment. Kris Marszalek, Crypto.com co-founder and CEO, has said before that the crypto market will need to reduce leverage before Bitcoin can get to $100,000.

Even with this dip, we aren’t seeing an immediate reduction in leverage. The estimated proportion of borrowed money to total value across all cryptocurrency exchanges stands at 0.24, a high not seen since August 2023.