Popular on-chain analyst Willy Woo unravels the factors driving the current Bitcoin (BTC) decline.
Woo tells his 1.1 million followers on the social media platform
The analyst shares a chart showing that the value of BTC’s destroyed coin days is rising sharply, indicating that long-dormant coins are moving, possibly to crypto exchanges where they can be sold on the open market.
“First let me tell you who’s selling. The OGs. They sell. They hold more BTC than all ETFs (exchange traded funds) combined… 10x more. And they sell in every bull market. This pattern is as old as the Genesis block.”
While long-term holders lose some of their Bitcoin, Woo say that the selling is exacerbated by the futures markets or what he calls paper BTC.
“Paper BTC has been flooding the market since 2017. Futures markets. Previously, if you wanted to buy BTC, you had to buy real BTC. You can now buy paper BTC. So a no-coiner can sell you that paper. Together you created a synthetic BTC.
That potential demand for BTC is diverted to paper BTC, which is met by counter traders who have no BTC to sell but only USD to back their bet.
Previously, BTC would make an exponential run because the only sellers were a trickle of the OGs and an even smaller amount of miners with their newly mined coins. Today, the magic of paper BTC is what you want to see.”
Woo shares a chart showing that while the supply of BTC in the spot market has been on a long-term downward trend, the supply of paper BTC appears to be witnessing an increase.
“The 2022 bear market was dictated by a flood of paper BTC when spot holders weren’t actually selling. In this current bull I have marked where the paper rose, these were times when the price did not rise. We are in one of these situations right now.”
At the time of writing, Bitcoin is worth $66,286.
Don’t miss a beat – Subscribe to receive email alerts straight to your inbox
Check price action
follow us on X, Facebook And Telegram
Surf to the Daily Hodl mix
Generated image: DALLE3