Renowned on-chain analyst Willy Woo is dissecting the factors fueling the current Bitcoin (
BTC
) downturn.
With a following of 1.1 million on the social media platform X, Woo reveals that Bitcoin OGs, early adopters and long-term holders of BTC, are actively offloading their holdings.
Displaying a chart, the analyst highlights that BTC’s coin days destroyed metric is sharply increasing, indicating that long-dormant coins are being transferred, potentially to cryptocurrency exchanges for sale on the open market.
“Let me clarify who is selling. The OGs. They are selling. They possess more BTC than all the ETFs (exchange-traded funds) combined… 10 times more. And they consistently sell during every bull market. This trend dates back to the Genesis block.”
While long-term holders are reducing their Bitcoin positions, Woo points out that the selling pressure is being intensified by the presence of futures markets, also known as paper BTC.
“Since 2017, paper BTC has inundated the market. Futures markets. Previously, if you wanted to purchase BTC, you had to buy actual BTC. Now, you can acquire paper BTC. Therefore, a non-holder can sell you that paper. Together, you create a synthetic BTC.
The demand for BTC is diverted to paper BTC, fulfilled by counter traders who lack actual BTC to sell, relying solely on USD to support their speculation.
In the past, BTC would experience exponential growth because the only sellers were a small number of OGs and miners with their freshly mined coins. Today, the influence of paper BTC is what demands attention.”
Sharing another chart, Woo notes that while the supply of spot market BTC has been declining over the long term, the supply of paper BTC appears to be on the rise.
“The 2022 bear market was shaped by an influx of paper BTC when spot holders were not actively selling. In the current bull market, I have highlighted instances where paper increased, coinciding with price stagnation. We are currently experiencing one of these situations.”
As of the time of writing, Bitcoin is valued at $66,286.
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