- Short-Term BTC Holders Could Be the Reason for BTC’s Latest Price Drop According to CryptoQuant’s Latest Analysis
- As of May 10, market panic and FUD led BTC to drop from $28,000 to $26,000 in an hour
Since Bitcoin, there has been a lot of speculation in the market [BTC] fell from a high of $29,703 on May 5 to $27,333 on May 8. Although BTC has traded 0.65% higher in the past 24 hours, its seven-day performance was still flashing red at the time of writing.
BTC’s fall could be a solid indication that there was tremendous ongoing selling activity in the market. According to CryptoQuant analyst onchained, short-term holders could be blamed for BTC’s move into the red.
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According to the CryptoQuant analyst, the analysis of Exchange Inflow Spent Outputs Age Bands (%) reveals which holders influence the price of BTC. BTC’s drop from $31,000 to 27,000 was due to increased BTC inflows into exchanges. According to onchained, 58.33% of issued output acquired between November and January was transferred to exchanges.
These participations were acquired between 15.4 and 18.3 thousand and were held for a period of 3 to 6 months. Moreover, these holdings accounted for a significant part of the expenses.
Source: CryptoQuant
In addition, the second significant age group who transferred their BTC to exchanges held onto it between a day and a week. This age group comprised 10.27% of the total output.
In contrast to short-term holder activity, the analysis indicated that long-term holders took a different path. As shown below, long-term holders did not contribute much to the expenses.
Expenditure output for holders aged 6 to 12 months included 0.38%, while 0.12% of output belonged to holders between 12 and 18 months. In addition, expenses for 2 to 3 year holders were 0.3% and for 3 to 5 years 0.444%.
Source: CryptoQuant
The appalling state of BTC
The king of cryptocurrencies went from $28,221 to $26,996 a matter of minutes on May 10. This panic and FUD in the market may be due to the fake news of the US government selling its interests.
The now-deleted tweet from a crypto analyst @1kbeetlejuice stated that the US government had sold its BTC holdings. The analyst published a wire explanation of the error that led to the panic.
In addition, it was also proved that the US government did not make any changes to their holdings on May 10.
被叫醒了，还没有仔细的看跌的原因, 估计要早晨了, 但是看了眼数据发现所谓的美国政卖出 #BTC The FUD, the 205,514 BTC code and the 205,514 BTC code, which is available along with the FUD code of 205,514 BTC. pic.twitter.com/hXKYbaVHXZ
— Phyrex (@Phyrex_Ni) May 10, 2023
Regarding the FUD of the past few hours, BTC managed to recover and at the time of writing is up 0.34% in the past hour. However, it certainly didn’t mean BTC was off the hook. A look at BTC’s four-hour chart indicated that the Relative Strength Index (RSI) was at 39.99.
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More worryingly, it was in free fall and would drop lower in the face of continued selling pressure. Additionally, at the time of writing, even though the MACD line (blue) was moving above the signal line (red), it could change course. BTC’s Chaikin Money Flow (CMF) also stood at 0.00 at the time of writing.
Source: TradingView
Given short-term traders’ shaky position coupled with the market panic, BTC’s position could be tight. According to a tweet from crypto trader Ash Crypto, the latest FUD in the market could have resulted in a significant number of small traders being wiped out of the market.
IN THE US TODAY SELL BITCOIN FUD
$100 MILLION LIQUIDATE IN 1 HOUR
IMAGINE SOME SMALL TRADERS PERFORMED BY ALL THESE MANIPULATIONS pic.twitter.com/O4bg5KeBNF
— Ash Crypto (@Ashcryptoreal) May 10, 2023