Bitcoin: Despite $11B ETF inflows, BTC stalls below $110K – Reasons?
- Promoting strain from long-term holders and whales has stored BTC muted above $100K.
- Nonetheless, VC Chamath Palihapitiya boldly projected BTC might hit $500K by October.
Is Bitcoin [BTC] value being suppressed?
This has been the query throughout Crypto Twitter as members wrestle to know how the worth has remained range-bound at $100K-$110K regardless of huge ETF inflows and treasury frenzy.
In Q2 alone, ETF inflows surged to almost $11 billion whereas Metaplanet, Technique, Twenty One Capital, and different treasury companies introduced hundreds of thousands and billions price of BTC buys.
Supply: Glassnode
In reality, final week alone, ETFs purchased 20.7K BTC or about 12.6% of the annual new Bitcoin (mined) provide.
However what do different on-chain knowledge say concerning the divergence between this excessive demand and value?
Lengthy-term holders are nonetheless offloading
Explaining the disconnect, Charles Edwards, founding father of macro hedge fund Capriole Funding, linked the strain to long-term holders (LTH).
He stated,
“It’s as a result of Bitcoin OGs (long-term holders) have been dumping on Wall St for the reason that ETF launch in January 2024, unloading their positions.”
Per the hooked up chart, 6-month holders (blue line) have absorbed (spiked) prior to now two months, whereas LTH dumped (+2 years holders, pink line).
Nonetheless, others claimed that some huge buys are being carried out through OTC (Over the Counter) desks.
In consequence, they not often replicate on conventional order books or CEXs (centralized exchanges). This reduces the potential impression of such strikes on the worth, noted TXMC Trades.
“An rising quantity of older cash are being reactivated, however they aren’t making their means into the order books. They’re being transacted OTC to produce massive consumers just like the ETFs, and these actions don’t have an effect on the worth in the identical means.”
Even so, provide on OTC desks and reserves on centralized exchanges have dropped 20-30% since 2024. This might set BTC up for a squeeze increased.
Nonetheless, the offloading from LTH appeared believable. Earlier in June, analyst Willy Woo stated that these with 10K-100K BTC and who purchased BTC at $0-$800 have been dumping since 2017.
“The massive whales >10k BTC have been promoting since 2017. ‘They’re silly!’ Most of these cash had been purchased between $0-$700 and held 8-16 years.”
Moreover, the variety of whales with over 1K BTC lowered from late Might, from 2,114 to 2,008, earlier than recovering within the final week of June. This transformation coincided with the $111K peak in Might, underscoring the whale strain.
Supply: Glassnode
In reality, retail curiosity additionally dropped 10% throughout this era, additional capping the BTC breakout prospect. Nonetheless, VC Chamath Palihapitiya projected BTC might hit $500K by October, citing a historic post-halving rally sample.
