Common on-chain analyst Willy Woo is breaking down the drivers powering the present Bitcoin (BTC) drawdown.
Woo tells his 1.1 million followers on the social media platform X that Bitcoin OGs, or early, long-term BTC holders, are closely unloading their stacks.
The analyst shares a chart displaying that BTC’s coin days destroyed metric is on a steep rise, suggesting that long-dormant cash are transferring, presumably to crypto exchanges the place they may very well be bought on the open market.
“First, let me let you know who’s promoting. The OGs. They’re promoting. They’ve extra BTC than all of the ETFs (exchange-traded funds) put collectively… 10x extra. And so they promote into each bull market. This sample is as previous because the Genesis block.”
Whereas long-term holders offload a few of their Bitcoin, Woo says that the promoting is being exacerbated by the futures markets or what he calls paper BTC.
“Paper BTC has flooded the market since 2017. Futures markets. In the event you needed to purchase BTC, it was once you had to purchase actual BTC. Now you can purchase paper BTC. Thus a no-coiner can promote you that paper. Collectively you might have made an artificial BTC.
That may-be demand for BTC will get diverted to paper BTC, fulfilled by counter merchants who don’t have any BTC to promote, they simply have USD to again their guess.
Within the previous days, BTC would go on an exponential run as a result of the one sellers have been a trickle from the OGs and an excellent smaller quantity from miners with their newly mined cash. At this time the magic of paper BTC is what you need to watch.”
Woo shares a chart displaying that whereas the availability of spot market BTC has been on a long-term downtrend, the availability of paper BTC seems to be witnessing an uptick.
“The 2022 bear market was dictated by a flood of paper BTC when spot holders didn’t actually promote. On this present bull, I’ve marked the place paper elevated, these have been occasions when the value didn’t rally. We’re in one in every of these proper now.”
At time of writing, Bitcoin is value $66,286.
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