July 14, 2024
1 Solar System Way, Planet Earth, USA

Bitcoin price pressured by whales, long-term holders and miners: Bitfinex

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Bitcoin (BTC) fell 4.4% last week pressured by long-term holders (LTH), whales and miners selling their holdings, according to the latest edition of the “Bitfinex Alpha” report. The movements occurred mainly through foreign exchange sales and over-the-counter (OTC) transactions.

These groups, historically known for disinvesting during bull markets and consolidation phases, are once again demonstrating their influence on the market. The recent selling, although less intense than in previous cases, underlines the significant impact that LTHs and whales have on liquidity and price fluctuations.

Image: Bitfinex/TradingView

Notably, on-chain metrics reveal that LTHs were the largest contributors to the recent sell-off, overshadowing exchange-traded fund (ETF) outflows. This activity aligns with the reversal of the core arbitrage trade highlighted in the previous week's Bitfinex Alpha report. The “Net Hodler Position Change” metric, which tracks monthly position changes of LTHs, has recorded negative activity, indicating a selling trend among this cohort.

Hodler's net position change. Image: Bitfinex/Glassnode

Additionally, the top 10 inflows to exchanges have increased as a proportion of total inflows, indicating increased whale activity. This trend usually precedes a price drop, although over the past three months the price of Bitcoin has remained relatively stable, possibly due to strong spot demand for ETFs. However, the ongoing selling is apparently limiting Bitcoin's potential price gains.

The Coinbase Premium Index, another indicator of whale behavior, suggests strong selling pressure from US investors on Coinbase Pro, as evidenced by a consistent negative percentage difference compared to other major exchanges.

Furthermore, an inverse relationship has been observed between the price of Bitcoin and miner reserves, with a notable decline in miner reserves coinciding with the peak of the Bitcoin price around March 2024, indicating that Miners were selling to capitalize on high prices and prepare for the halving event.

As mining reserves approach four-year lows, it suggests that selling pressure from this group may be approaching a critical point, which could impact future market dynamics.

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