In the past two days, long-term investors who have firmly held the currency have sold about US$2.4 billion worth of Bitcoin; 26% of the Bitcoin sold in the past 30 days came from investors with holding costs higher than US$90,000; Compass Point analyst Ed Engel said: "The collective cutting of large-scale bottom-hunting investors is a very typical market feature at the end of a bear market. This makes us more certain that the current Bitcoin bear market has come to an end."
Analysis by brokerage Compass Point pointed out that large Bitcoin investors who were originally firm long-term holders have joined the selling force. This phenomenon may indicate that the current downward trend of cryptocurrency is coming to an end.
Ed Engel, an analyst at the institution, said in a research report on Tuesday: The so-called long-term position holders refer to investors whose holding period is no less than 155 days (about 5 months). Such investors remained largely unchanged from February to April this year, but have turned to sellers in recent weeks.
Engel said the group sold about $2.4 billion in Bitcoin over the past two days.Significantly changed the supply and demand pattern of Bitcoin.
He also mentioned that 26% of the chips sold in Bitcoin in the past 30 days came from high entry funds with a buying cost of more than $90,000.
"This group of investors with high positions and heavy positions have been holding down their positions throughout the bear market, but as Bitcoin continues to hit new cycle lows, they finally choose to cut their flesh and leave the market. The collective surrender of high-level main players is a common signal at the end of a bear market. Based on this, we judge that the Bitcoin bear market is nearing the end."
Suppressed by the uncertainty caused by the geopolitical conflict in Iran, Bitcoin has been unable to return to its historical high of over $126,000 in October last year; on the other hand, U.S. stocks continue to set new historical records. The trends of the two types of assets are seriously divergent, causing the market to question the two core investment logics of Bitcoin: first, as a "digital gold", it has the property of a safe haven in a geo-turbulent environment; second, the trend is in line with high-volatility growth technology stocks.
According to SoSoValue data, the Bitcoin spot ETF experienced net outflows for the 12th consecutive trading day on Tuesday, setting a record for the longest consecutive withdrawal in history; the total size of related ETFs shrank from US$107.8 billion on May 14 to US$85 billion.
Affected by the strategic investment company's small reduction of 32 Bitcoins, panic selling emerged in the market on Monday, and a large number of leveraged long positions were liquidated one after another, further dragging down the price of the currency; as of this week, Bitcoin's weekly decline has reached 12%. However, analysts generally believe that the company’s small sell-off is not the core cause of the decline in currency prices.
Citi analyst Alex Sanders said in a research report: "ETF fund flows are the core factor affecting the price of Bitcoin, which can explain about 45% of the weekly price fluctuations. It is also a key indicator for observing market participation and investment sentiment. At this stage, ETFs continue to experience net outflows, and the probability of the implementation of the U.S. Capital Market Architecture Act that is expected to boost market confidence continues to decrease."
He added: "Under the premise that regulatory policies are not implemented and the market does not trigger inflationary hedging buying due to fiscal problems, and the U.S. stock market and cryptocurrency prices continue to be separated, it is expected that Bitcoin market sentiment will continue to be sluggish."