Bitcoin’s recent price drop is being attributed to long-term holders rather than institutional investors, despite initial speculation to the contrary.
Bitcoin (BTC) price fell over 5.6% in the past 24 hours to trade at $92,774 as of 8:52 am UTC on Nov. 26, Cointelegraph data shows.
BTC/USD, 1-month chart. Source: Cointelegraph
However, it wasn’t the institutions or exchange-traded funds (ETFs) that caused Bitcoin’s price decline, as the data points to long-term holders, also known as hodlers, according to Eric Balchunas, a senior ETF analyst at Bloomberg.
The analyst wrote in a Nov. 25 X post:
“I see a lot of CT baffled/frustrated as to how Saylor can buy $5b of BTC but price doesn’t move up - which is same thing I hear sometimes about ETFs after big flows. Here’s data showing what I’ve long been saying: the call is coming from inside the house, it’s long-term hodlers.”
The correction came shortly after Bitcoin recorded its biggest monthly candle in history as it topped $99,000 on Nov. 22 for the first time. Some analysts still expect Bitcoin to breach the $100,000 record high before the end of the month.
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Bitcoin hodlers caused BTC correction to $92,000: Data
Onchain data reveals that ETF flows haven’t been the primary causes of sell pressure for Bitcoin.
Moreover, the ETFs have absorbed a significant amount of selling pressure, which came from long-term holders, crypto trader and technical analyst Kyle du Plessis wrote in a Nov. 24 X post:
“Long-term Bitcoin holders sold 128K $BTC, but U.S. spot ETFs absorbed 90% of the selling pressure. Strong institutional demand is fueling BTC’s rally, bringing it closer to the $100K milestone.”
Bitcoin: Long-term holders and US spot ETF balances position change. Source: Kyledoops
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The correction could be beneficial for the sustainability of the current Bitcoin rally, considering the growing leverage in crypto markets.
On Nov. 12, Kris Marszalek, the co-founder and CEO of Crypto.com, warned that the crypto market will need deleveraging before Bitcoin can breach $100,000.
Bitcoin: Estimated leverage ratio, all exchanges. Source: CryptoQuant
The correction didn’t trigger an immediate deleveraging. Bitcoin’s estimated leverage ratio across all cryptocurrency exchanges stood at 0.24, which marks a high last seen in August 2023, CryptoQuant data shows.
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