Common on-chain analyst Willy Woo is breaking down the drivers powering the present Bitcoin (BTC) drawdown.
Woo tells his 1.1 million followers on the social media platform X that Bitcoin OGs, or early, long-term BTC holders, are closely unloading their stacks.
The analyst shares a chart exhibiting that BTC’s coin days destroyed metric is on a steep rise, suggesting that long-dormant cash are shifting, probably to crypto exchanges the place they could possibly be bought on the open market.
“First, let me inform you who’s promoting. The OGs. They’re promoting. They’ve extra BTC than all of the ETFs (exchange-traded funds) put collectively… 10x extra. And so they promote into each bull market. This sample is as previous because the Genesis block.”
Whereas long-term holders offload a few of their Bitcoin, Woo says that the promoting is being exacerbated by the futures markets or what he calls paper BTC.
“Paper BTC has flooded the market since 2017. Futures markets. In case you needed to purchase BTC, it was once you had to purchase actual BTC. Now you can purchase paper BTC. Thus a no-coiner can promote you that paper. Collectively you might have made an artificial BTC.
That will-be demand for BTC will get diverted to paper BTC, fulfilled by counter merchants who don’t have any BTC to promote, they only have USD to again their wager.
Within the previous days, BTC would go on an exponential run as a result of the one sellers had been a trickle from the OGs and a fair smaller quantity from miners with their newly mined cash. Right now the magic of paper BTC is what you wish to watch.”
Woo shares a chart exhibiting that whereas the availability of spot market BTC has been on a long-term downtrend, the availability of paper BTC seems to be witnessing an uptick.
“The 2022 bear market was dictated by a flood of paper BTC when spot holders didn’t actually promote. On this present bull, I’ve marked the place paper elevated, these had been occasions when the value didn’t rally. We’re in one among these proper now.”
At time of writing, Bitcoin is value $66,286.
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