Bitcoin (BTC) Price Correction: Long-Term Holders Take Center Stage

Bitcoin’s (BTC) recent price dip to $92,000 is being attributed to long-term holders (hodlers) rather than institutional investors or exchange-traded funds (ETFs)

Bitcoin (BTC) price experienced a brief dip to $92,000 on November 26, a decline of over 5.6% in 24 hours, according to data from Binance. The price had earlier soared to a record high of $99,000 during the week.

However, a closer examination of on-chain data suggests that the recent correction may be largely driven by long-term Bitcoin (BTC) holders, rather than institutional investors or exchange-traded funds (ETFs).

According to Eric Balchunas, a senior ETF analyst at Bloomberg, the sell-off appears to be coming from hodlers rather than the flow of funds into ETFs. In a post on X on November 25, Balchunas stated:

“The call is coming from inside the house, it’s long-term hodlers.”

The price decline comes as Bitcoin燭台圖 closed its largest monthly candle in history, highlighting increased activity among hodlers.

Meanwhile, crypto trader and technical analyst Kyle du Plessis pointed out that U.S. spot ETFs absorbed 90% of the selling pressure as hodlers sold 128,000 BTC.

“Strong institutional demand is fueling BTC's rally, bringing it closer to the $100K milestone,” du Plessis added.

The following chart shows the relationship between long-term holder selling and ETF balances during the recent market activity:

(Insert Chart: Long-term holders and ETF balances position change.)

It's worth noting that the market leverage, as indicated by CryptoQuant data, remains high with an estimated leverage ratio of 0.24 across all exchanges. This is the highest level of leverage seen since August 2023.

Several market participants have expressed concerns about the sustainability of Bitcoin's rally amid high leverage. For instance, Kris Marszalek, co-founder and CEO of Crypto.com, stated on November 12 that “The crypto market will need deleveraging before BTC can breach $100,000.”

However, as highlighted by Cointelegraph, the role of hodlers and the management of leverage will continue to be crucial in shaping Bitcoin's future trajectory.