- Early Bitcoin miners selling decade-old holdings contribute to BTC price correction.
- Low liquidity exacerbates the impact of large sell-offs, triggering a significant price drop.
- ProShares Short Bitcoin Strategy ETF sees the highest volume as traders bet on declining prices.
Bitcoin’s recent price correction has raised eyebrows as onchain data suggests that a significant amount of Bitcoin mined in 2010 was dumped following the all-time high (ATH) breach. This move, partially attributed to early Bitcoin miners cashing out their decade-old block rewards, has had a tangible impact on the market, with Bitcoin witnessing a decline to around $65,500 after briefly touching $69,000.
According to insights from CryptoQuant, 1,000 Bitcoins, valued at approximately $69 million, were sent to the cryptocurrency exchange Coinbase from an address dating back to 2010, just before Bitcoin hit its latest ATH.
The transfer of such a substantial amount to an exchange typically signals an intention to sell and capitalize on profits. This activity, attributed to miners by a CryptoQuant analyst, implies that those who mined Bitcoin in its early days are now cashing out after 14 years of HODLing.
The selloff was notable for the lack of liquidity to absorb such a large volume of sell orders when there are many shorts prepared to enter the market at the current prices. The uneven distribution between demand and supply has a negative effect on the market, as can be seen from the crash of prices that followed the sale of 1,000 BTC.
The repercussions of this selloff were felt across the market, leading to widespread liquidations of leveraged long positions, with over $1 billion worth of liquidations reported on Binance alone, according to trading firm QCP Group. Despite the liquidation event, term futures continue to trade at a notable premium to spot prices, making the cash and carry trade an attractive option for investors.
Meanwhile, spot Bitcoin exchange-traded funds (ETFs) are experiencing heightened trading activity, with total volume reaching $10 billion across ten funds in a single day.
Notably, the ProShares Short Bitcoin Strategy ETF, which allows holders to bet on a declining Bitcoin price, saw the most substantial volume during this period, according to Bloomberg ETF analyst Eric Balchunas.
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