Since Bitcoin (BTC) plummeted from a high of $29,703 on May 5 to $27,333 on May 8, there has been a lot of speculation in the market. Despite trading 0.65% higher in the last 24 hours, BTC’s seven-day performance remains negative as of writing.
The decline in BTC can be a strong indicator of widespread selling activity in the market. According to researcher CryptoQuant onchained, short-term holders may be too responsible for BTC’s negative trend.
According to CryptoQuant analysts, the Exchange Inflow Spend Outputs Age Bands (%) analysis reveals which holders influence the price of BTC. BTC reduction from $31k to 27k was due to increased BTC inflow to exchanges. According to Onchained, between November and January, 58.33% of spent output was transferred to exchanges.
These holdings were purchased for between $15,400 and $18,300 and held for 3 to 6 months. Furthermore, these holdings account for a sizeable amount of expenditure output.
Additionally, the second largest age group that transfers their BTC to exchanges stores it between one day and one week. This age group accounts for 10.27% of the total output.
Long-term holders, as opposed to short-term investors, are taking a different path, according to the data. Long-term holders, as seen below, do not make a significant contribution to spending output.
The expenditure output for households aged 6 to 12 months is 0.38%, while expenses for households aged 12 to 18 months are 0.12%. Furthermore, output output for holders with 2 to 3 years reached 0.3% and 0.444% for holders with 3 to 5 years.
On May 10, the cryptocurrency king fell from $28,221 to $26,996 in a matter of minutes. This fear of the market and FUD could be the result of fake news about the US government selling its shares. A now-deleted tweet from @1kbeetlejuice, a crypto analyst, indicates that the US government has liquidated its BTC holdings. The analyst describes the issue causing the panic in a thread.
In addition, it was pointed out that the US government made no adjustments to its holdings on May 10. Regarding recent FUD, BTC has managed to recover and is trading up 0.34% in the last hour as of press time. However, this does not absolve BTC of all liability. BTC’s four-hour chart shows that the Relative Strength Index (RSI) is 39.99.
Of more concern is the free fall and will continue to fall in the face of continued selling pressure. Furthermore, while the MACD line (blue) is pointing above the signal line (red) at the time of publication, it may change direction. At the time of writing, BTC’s Chaikin Money Flow (CMF) is also 0.00.
Given the fragile position of short-term traders, as well as market panic, BTC’s position could be precarious. According to a tweet from crypto trader Ash Crypto, the market’s latest FUD could result in a large number of small traders being knocked out.