Charles Edwards, the founder of Capriole Investments, a hedge fund specializing in Bitcoin and digital assets, has revealed the factors and individuals responsible for the recent stagnation and decline in Bitcoin’s price.
Bitcoin and the entire cryptocurrency market have experienced significant losses over the past few weeks. The total market capitalization dropped by over 4% in the past 24 hours to approximately $2.13 trillion, as the leading digital asset, BTC, saw its value decrease by more than 3.3% today.
Over the last seven days, Bitcoin’s price has also fallen by 5.71%, and it is currently trading slightly above $57,000, as per CoinMarketCap data.
Unsurprisingly, this poor performance has been mirrored in the prices of most alternative coins, with Ethereum, BNB, Solana, and XRP, respectively, experiencing losses of 9.38%, 9.44%, 8.66%, and 5.97% over the last seven days.
Nonetheless, this overall decline doesn’t seem likely to reverse soon, as a prominent crypto executive recently stated that the recovery of Bitcoin’s price is in jeopardy due to influential figures’ continued selling of holdings.
Factors influencing Bitcoin’s price
The decline of BTC, according to Charles Edwards, can be attributed in part to major players offloading their holdings. He emphasizes that the demand and supply dynamics from BTC miners, ETFs, and long-term holders (LTH) are the primary reasons we have not seen significant price increases.
Edwards contends that examining the data of Bitcoin’s four most significant participants shows that a net outflow of roughly 374,000 BTC, totaling $24 billion, has been sold into the market in 2024 alone.
Consequently, the analyst asserts that the news related to MicroStartegy’s Michael Saylor, DELL Computers’ Michael Dell, and Exchange Traded Funds are merely creating unnecessary commotion.
Meanwhile, in response to a comment from a Bitcoin analyst named “Willy,” the LTH metric was adjusted from +2 years to 155 days, indicating a net outflow of approximately $40.5 billion, according to Edwards.
Furthermore, factoring in and excluding Grayscale’s GBTC outflows, the total outflow across the three entities amounted to $18 billion worth of BTC.
Contributions to the market situation
According to other well-known blockchain data analytics companies like Spot On Chain, after five consecutive days of inflows to Bitcoin ETFs totaling $129.5 million through 1 July, the trend reversed with an outflow of $13.7 million on 2 July. This implies that outflows from U.S. spot Bitcoin ETFs have significantly contributed to the current market situation.
Similarly, the extensive sale of large quantities of Bitcoin by the German Government has significantly impacted the market struggles. Arkham reports that the German Government transferred 1300 BTC ($76M) to exchange deposits at Kraken, Bitstamp, and Coinbase.
They also transferred 1700 BTC ($99M) to an address, implying that the Government may be moving the funds to a deposit for an institutional service or OTC. Meanwhile, according to Arkham, the German Government still holds 40,359 BTC ($2.3B) in tagged addresses on-chain.
Additional clues suggest that BTC from MtGox wallets has begun to be moved to an exchange today, intending to compensate those impacted by the 2014 hack. The major payouts are yet to come, but Bitcoin’s price has already experienced a significant drop in value.
At the moment, however, the Fear & Greed Index is at 45, indicating a neutral sentiment among market participants. This means that investors are not overly fearful or excessively greedy right now, even though there is still a lot of uncertainty.
