As the bear market continues to linger, analysts have weighed in on the decline of the flagship cryptocurrency, Bitcoin, and the crypto market, by extension. This time, another crypto analyst has explained what is influencing Bitcoin’s price decline.
Factors Causing BTC’s Decline
Bitcoin notably dropped below the $27,000 level on October 12. Addressing this decline in a recent episode on the ‘Cheeky Crypto’ YouTube channel, Crypto analyst Nick noted that there wasn’t much going on in the news and the only thing that could have affected Bitcoin’s drop was the US inflation data, which was recently released with the CPI rising higher than expected.
He then analyzed key on-chain metrics that could have affected Bitcoin’s price. According to data he pulled up from Cheeky Crypto’s site, there were 903,210 active addresses in the last twenty-four hours (he released the video on October 12).
The data also showed that 610,686 active addresses received Bitcoin during that period, and 560,331 active addresses sent Bitcoin during the same time frame, amounting to 265,000 transactions. What was, however, more interesting was the fact that only 23 million addresses held BTC out of the total 48.7 million addresses in existence.
He stated that these figures were important to give an insight into Bitcoin’s adoption rate as one could easily assume that almost all the Bitcoin addresses in existence held BTC. Meanwhile, less than half actually did.
BTC price continues to fluctuate | Source: BTCUSD on Tradingview.com
More Selling Pressure For Bitcoin
As to another factor that could be causing the decline, he noted that retail investors had been selling in the past few days. However, the silver lining, as Nick highlighted, is that this selloff suggests that institutional investors are accumulating once more, considering that they had once dumped their tokens on these retail investors.
Additionally, 108 wallets hold over 10,000 BTC. These wallets, which Nick labeled as the “master manipulators” of BTC’s price, are also experiencing a similar sell-off trend as these wallets are down 8.47% in the last 180 days, which suggests that they are “aggressively” selling off.
From the chart he shared, one could see that the trend dates back to April 2023 (the peak of accumulation by these wallets) as they have begun to cool off and dump some of their holdings on the market. His analysis suggests that there could be a bigger picture regarding Bitcoin’s decline rather than any immediate factor.
Despite this decline and the amount of liquidations that have occurred, Nick is still optimistic that Bitcoin could end this month in the green. October is reported to be one of the best-performing months for Bitcoin, with the crypto token ending October in the green for the last five years.
Featured image from The Independent, chart from Tradingview.com