In a recent analysis, Glassnode has pinpointed four significant events that played a crucial role in the decline of Bitcoin to $81,000. Following a peak of $94,000 on January 14, the cryptocurrency faced intense selling pressure, leading to this notable drop by January 30.
One of the primary contributors to this downturn is the distribution of Bitcoin by long-term holders. Over the past month, these holders have been selling an average of 12,000 BTC daily, culminating in approximately 370,000 BTC being distributed each month. This consistent selling has introduced persistent pressure on Bitcoin”s price, undermining its stability.
Additionally, the reversal of inflows into U.S. spot Bitcoin ETFs has compounded the situation. After a brief inflow of $6.84 million on January 26, Bitcoin ETFs experienced unprecedented outflows totaling $984 million since January 27. This included a staggering single-day withdrawal of $817.87 million, marking the largest intraday outflow of the year. Such a sharp reversal has diminished a vital source of demand for Bitcoin, further intensifying sell-side pressure.
Moreover, miner activity has resumed selling after a temporary pause earlier in the year. Glassnode”s data indicates a net transfer volume of -48 BTC from miners, signaling their active participation in the market through sales. This renewed selling coincided with a wave of forced liquidations, where traders who had taken leveraged long positions began to close out their positions as prices fell. In just 24 hours, about $792 million in liquidations occurred, with long positions accounting for 96% of this total.
These combined factors have created a challenging environment for Bitcoin, leading to its substantial price decline and raising concerns among market participants. As the cryptocurrency continues to navigate these pressures, the market remains on edge regarding future price movements.
