Unveiling the Factors Behind Bitcoin’s Price Dip: Miners and Whales in Action

By 0xK2 05/17/23 2:54 PM

The recent correction in Bitcoin’s price has left many investors wondering about the underlying factors that led to this downturn. It appears that both miners and whales played a significant role in shaping the market dynamics during this period.

One notable trend observed is the capitalization by Long-Term Holders (LTHs), who took advantage of the year’s highest profit ratio of over 34%. These experienced holders managed to realize substantial profits, and their actions contributed to the downward pressure on Bitcoin’s price. In fact, across the board, market participants enjoyed average profits exceeding 7%, indicating a widespread sell-off during this correction.

Another factor influencing the price dip is the increased activity of whales depositing Bitcoin into exchanges. The Exchange Whale Ratio witnessed a surge in early May, indicating that large-scale investors were actively moving their Bitcoin holdings to trading platforms. These whales accounted for a significant portion of the overall market, with transfers involving more than 40% of the total coins in circulation.

Adding to the selling pressure, daily outflows from miner wallets reached near-record highs. Although the influence of miners on price movements has diminished over time, their actions still hold significance due to their substantial Bitcoin holdings. Currently, miners possess more than 9% of the total Bitcoin supply, which includes the coins attributed to Satoshi Nakamoto.

Examining the behavior of investors who held Bitcoin for 1 to 3 months, a significant support level can be observed at their cost basis of $26.5K. This indicates that during the recent price correction, this price point played a crucial role in halting further downward movement.

Understanding the actions of miners and whales is crucial for investors as it provides insights into the market dynamics and helps anticipate potential price movements. While Bitcoin’s correction may have caused temporary unease among market participants, analyzing these factors can provide valuable information for making informed investment decisions in the future.

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