- BTC could be dampened as key players dump, according to the founder of Capriole Investments.
- The Bitcoin miner crisis continues and could be a major headwind for BTC’s recovery.
After peaking at $63.8K on July 1, Bitcoin [BTC] has weakened, falling to a low of $57K on July 4. That was down from 9% in July and marked the fourth consecutive month of sideways movement since the second quarter.
What causes the dive?
Charles Edwards, founder of crypto hedge fund Capriole Investments, claimed that BTC’s weakening was partly due to the dumping of holdings of ‘key players’.
“Here’s why we haven’t figured it out yet… If you look at the data from the top four players in Bitcoin, we see a net flow equivalent to $24 billion being dumped into the market in 2024.”
Source: X/Charles Edwards
Edwards’ perspective was based on supply and demand from BTC miners, ETFs, and long-term holders (LTH). Based on these three entities, approximately 374,000 BTC, worth more than $20 billion, has been dumped onto the market, according to Edwards.
When the LTH measure was adjusted from +2 years to 155 days, the net outflow was about $40 billion, according to Edwards.
Furthermore, when Grayscale’s GBTC outflows are included and removed, the total dump between the three entities was $18 billion in BTC outflows.
AMBCrypto’s Evaluation Spot BTC ETF Flows revealed that net flows fluctuated significantly in the second quarter, in contrast to the steady positive flows recorded in the first quarter. So the stagnant demand from ETFs confirmed Edwards’ thesis.
Source: SoSo value
Another major entity mentioned in the analysis, BTC miners, were still deep in a profitability crisis after the halving. As a result, struggling miners could dump more of their BTC holdings to stay afloat.
The miners’ crisis could further delay the bullish reversal for the largest digital asset. noted Willie Woo.
‘Every day I look at seven squiggly lines to see if it’s time. No not yet. Miners are still bleeding and writhing in pain.”
Source: Willy Woo
For perspective, the Bitcoin Hash Ribbons are moving averages that indicate when hash rates drop, particularly during miner profitability crises.
While they also historically indicated a market bottom, the metric has yet to recover and further strengthen BTCs weakening market structure.