Bitcoin prices have stumped many investors over the past few weeks. Despite the significant accumulation by institutions and finance companies, Bitcoin prices remain caught up in side-to-side behaviour. Is this the result of “paper bitcoin” or is it just a witness to the push and pull of supply and demand?
In my latest video analysis, Paper Bitcoin ruins the Bitcoin Bull MarketI will delve into chain data, Treasury holdings, and derivatives activities to segregate facts from the plot and explain what actually drives Bitcoin prices.
Institutional accumulation and stagnation of Bitcoin prices
Over the past few months, ETFs and finance companies have accumulated estimates 200,000 BTC. For perspective, the total holdings of the Ministry of Finance are now sitting shyly at 1 million bitcoin. But despite these flows, Bitcoin prices are flatlined after being raised to $108,000 after temporarily touching on a new all-time high of over $120,000.
Why is this institutional demand not reflected in Bitcoin prices? The answer lies in profits from long-term holders. More since July 450,000 BTC It moved from long-term wallets to new short-term market participants. This distribution effectively neutralized the bullish effects of institutional influx on Bitcoin prices.
Long-term holders making profits
On-chain data shows clear sales from cohorts holding Bitcoin 4-10 years. These investors have accumulated at much lower prices and are making profits now as Bitcoin prices are pushed into record territory.
This pattern is not new. Historically, long-term holders reduce exposure as retailers and institutions bid higher Bitcoin prices, but re-accumulate as markets cool. Current HODL Waves data shows that sales pressure from this group is not available. accelerationadd weight to the sideway chops seen at Bitcoin prices.
Derivative factors
Another drug in Bitcoin’s price action is the rise in futures and options activity. Since July, open interest in derivatives has risen almost 50,000 BTC The whole exchange. While this is not direct evidence of “paper bitcoin,” it means that capital is flowing into leveraged bets rather than accumulation of spots, limiting the upside-down pressure on Bitcoin’s price.
The CME futures and options market has also expanded significantly, amplifying the impact of derivatives on short-term Bitcoin price movements. Net Effect: Increased contract-bound liquidity and reduces direct purchasing pressure on BTC itself.
Movement demand and supply
So is Bitcoin prices manipulated by paper claims? The evidence does not strongly support that conclusion. What we are seeing is Real-time supply and demand economics At work:
- ~200,000 BTC accumulated By the institution.
- ~450,000 BTC distributed Depends on long term holders.
- Over 50,000 BTC tied up Derivatives market.
Adding that together explains why Bitcoin prices have stalled despite institutional demand for grabs headlines.
What’s next for Bitcoin price?
The current conditions show more choppy integration in the short term, but this doesn’t look like the top of the market. If the funding rate is reversed to a negative, a short aperture can boost another leg at the price of Bitcoin. For now, however, imbalances in accumulation and distribution suggest that lateral action may persist.
Zooming out, the bitcoin bull market remains intact. Investors worried about “paper bitcoin” should remember. You need to remember that accumulation of spots is happening. Without it, Bitcoin prices would trade much lower than today.
Disclaimer: This article is for informational purposes only and should not be considered financial advice. Always do your own research before making an investment decision.
Is this post a paper bitcoin behind stagnant bitcoin prices? It first appeared in Bitcoin Magazine and is written by Matt Crosby.
