By: Isha Das
Bitcoin's market was significantly influenced by short-term holders, particularly around Oct. 16, when Bitcoin prices hit a high of $30,000. This surge was largely driven by the circulation of misinformation regarding an Exchange-Traded Fund (ETF) approval. Short-term holders, categorized as investors who have secured Bitcoin within the previous 155 days, capitalized on this spike, offloading approximately 30,000 Bitcoins for earnings. This marked the third largest instance of this pattern for the year.
Interestingly, a similar pattern has been noted at times of local price dips, as observed in January, March (post SVB collapse), and June. During these occasions, Bitcoin prices typically increased, leading this group to cash out for profits. Nevertheless, this trend applied additional selling pressure on Bitcoin, bringing about possible short-term impediments for Bitcoin's pricing.
Alongside this, the supply of Bitcoin in the possession of short-term holders has plummeted to an all-time low of 2,357,000. Meanwhile, major exchanges, such as Binance, reported a substantial decrease in Bitcoin liquidity, leading to slippage for traders during the height of the ETF rumor-induced frenzy.
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