Recent data indicates that Bitcoin’s sharp price drop to $92,200 is primarily driven by long-term holders rather than institutional investors or exchange-traded funds (ETFs), countering initial speculation.
Hodlers Take the Lead in Bitcoin Sell-Off
Bitcoin experienced a 5.6% decline within 24 hours as of Nov. 26. However, analysts suggest that the sell pressure originates from long-term Bitcoin holders, often referred to as “hodlers.”
Eric Balchunas, a senior ETF analyst at Bloomberg, emphasized this point in a Nov. 25 post on X (formerly Twitter). He wrote:
“The call is coming from inside the house; it’s long-term hodlers.”
Balchunas noted confusion among some observers, who questioned why massive Bitcoin purchases by entities like Michael Saylor’s MicroStrategy hadn’t caused a price surge. His analysis highlighted that long-term holders were liquidating their assets despite significant institutional demand.
ETFs Absorbing Sell Pressure
Despite the sell-off, spot ETFs in the U.S. absorbed about 90% of the selling pressure from long-term holders, according to crypto trader and technical analyst Kyle du Plessis. In a Nov. 24 post, he attributed Bitcoin’s continued momentum toward the $100,000 milestone to robust institutional buying.
Long-term holders reportedly sold 128,000 BTC, but ETFs have played a crucial role in sustaining the rally.
Healthy Correction for Bitcoin’s Growth
Bitcoin’s correction follows its record-breaking surge to $99,000 on Nov. 22, the largest monthly gain in its history. While some analysts still expect Bitcoin to breach the $100,000 mark before month-end, others view the dip as a necessary reset.
Kris Marszalek, CEO of Crypto.com, previously cautioned that the market needs to deleverage to sustain Bitcoin’s rally beyond $100,000. Despite this warning, no significant deleveraging has occurred yet. CryptoQuant data shows Bitcoin’s leverage ratio remains elevated at 0.24, last seen in August 2023.
Outlook: $100K Still in Sight?
While the recent correction underscores the role of long-term hodlers in shaping market trends, institutional interest continues to provide strong support. This dynamic suggests that Bitcoin’s path to $100,000 may still be achievable, but only with market stability and reduced leverage.
