Bitcoin (BTC) Falls More Than 6% in 7 Days, Declines from Correlation with the Nasdaq Composite Index

The Federal Reserve has signaled only one interest rate drop for the rest of the year, which normally affects asset classes such as cryptocurrencies.

Bitcoin (CRYPTO: BTC) price has fallen more than 6% in the last seven days, diverging from its usual positive correlation with the Nasdaq Composite Index.

The Federal Reserve has signaled only one interest rate cut for the rest of the year, which typically impacts asset classes like cryptocurrencies. This decision may have played a role in shaping market sentiment for Bitcoin.

However, according to Markus Thielen of 10x Research, sustained selling in a market at a particular price level is less influenced by external events or narratives and more by the perception among large sellers that prices have become overvalued at that point.

Thielen points out that the November 2021 peak near $70,000 is a crucial threshold where long-term Bitcoin holders are likely to sell, seeing it as an optimal time to cash out at high prices.

Interestingly, a wallet that had been dormant since 2018 has transferred 8,000 BTC (worth over $500 million) to the cryptocurrency exchange Binance. Such moves are often interpreted as precursors to large sales, suggesting that long-term holders may be taking profits at current price levels.

Data from CryptoQuant shows a decrease in BTC last active for 12 months and two years, indicating that holders are cashing out as the price approaches record highs.

Ilan Solot of Marex Solutions notes that addresses last active for 1-2 years have been selling since prices peaked, which is being offset by accumulation from longer-term holders.

Thielen highlights that of the 1.8 million BTC inactive for a decade, around 1.1 million BTC is credited to Satoshi, while predicting that Mt. Gox holders will convert BTC to fiat by late 2024.

Mt. Gox, the once-prominent crypto exchange that collapsed in 2014, is set to distribute 142,000 BTC and 143,000 BCH to creditors by October/November 2024. This distribution could have a substantial impact on the market if creditors decide to sell their assets upon receiving them.

Bitcoin miners have also ramped up their selling activity. For instance, Marathon Digital (NASDAQ:MARA) has sold 1,400 Bitcoin for $98 million this month.

Additionally, miners reportedly sold over 1,200 BTC in a single day recently through over-the-counter desks, indicating significant selling pressure from this sector.

The hashrate, which measures the computational power dedicated to the Bitcoin blockchain, has also dropped recently. This decrease, from 622 exahashes per second (EH/s) to 599 EH/s, could indicate miner capitulation or reduced mining activity due to various factors such as regulatory pressures and operating costs.