Bitcoin Faces Market Turbulence as Long-Term Holders and Miners Cash Out, Raising Concerns about Short-Term Stability

In recent weeks, Bitcoin has faced significant challenges, marked by considerable selling pressures that have instigated concerns regarding its short-term stability.

Bitcoin has encountered substantial selling pressures in recent weeks, sparking concerns about its short-term stability. This turbulence stems primarily from large-scale sell-offs by long-term holders, early miners, and managers of Bitcoin Exchange-Traded Funds (ETFs).

Collectively, these entities have withdrawn billions of dollars from Bitcoin, impacting the market significantly.

Long-term holders alone have sold approximately $1.2 billion worth of Bitcoin over the last two weeks. This sell-off has amplified the pressure on the market, increasing volatility and uncertainty.

According to Ki Young Ju, CEO of blockchain analytics firm CryptoQuant, such vast amounts of sell-side liquidity need to be absorbed through over-the-counter transactions to prevent further market destabilization.

Without adequate absorption, brokers might be forced to transfer Bitcoin to exchanges, potentially leading to further market disruptions.

Early Bitcoin miners have also played a significant role in the sell-off, cashing out around $550 million in profits while Bitcoin prices fluctuated between $62,000 and $70,000. This group's actions have notably increased the downward pressure on Bitcoin's pricing.

The timing of these sell-offs coincides with a period of miner capitulation following the recent Bitcoin halving—an event that reduces the reward for mining new blocks and often results in less efficient miners being driven out of the network.

This halving has led to a temporary increase in Bitcoin being sold as exiting miners liquidate their holdings, which typically causes a dip in Bitcoin’s value before a potential recovery.

On-chain analyst Willy Woo has highlighted the need for a thorough clearing of open interest in the futures markets to pave the way for a resumption of bullish trends. He emphasizes the necessity for substantial liquidations before the market can stabilize and regain upward momentum.

To further complicate the landscape, AI-driven analytics platform Spot on Chain has reported persistent negative net flows in Bitcoin ETFs.

As of June 18, 2024, there was a net outflow of $152 million from Bitcoin ETFs, continuing a trend that has seen a total outflow of $714 million over four consecutive days.

Notable institutions like Grayscale and Fidelity experienced significant outflows, which have added to the overall bearish sentiment in the market.

Despite these challenges, media sentiment towards Bitcoin remains largely bullish, according to Ki Young Ju. However, he cautions that this optimism might not necessarily lead to favorable outcomes for the cryptocurrency.

With the extensive sell-offs by long-term stakeholders, early miners, and the ongoing negative flows from BTC ETFs, Bitcoin may be poised for a prolonged period of correction as it struggles to stabilize and attract new retail interest amidst these turbulent market conditions.

News source：https://www.kdj.com/cryptocurrencies-news/articles/bitcoin-market-turbulence-term-holders-miners-cash-raising-concerns-shortterm-stability.html

The above is the detailed content of Bitcoin Faces Market Turbulence as Long-Term Holders and Miners Cash Out, Raising Concerns about Short-Term Stability. For more information, please follow other related articles on the PHP Chinese website!