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Lack of Response in Bitcoin: Bitfinex Analysts Unveil the Intriguing Explanation
Bitfinex analysts have shed light on the absence of significant reactions in Bitcoin, pointing to a noteworthy cause for the subdued activity.
Author: Elif Azra Güven
July 5, 2024 – 18:47
Update: 11 hours ago
Following a lackluster period of decline, Bitfinex analysts have conducted a fresh analysis to uncover the underlying reasons behind Bitcoin’s downward trend. In discussions with The Block, the analysts highlighted the diminishing market liquidity, attributing it to a reduced influx of institutional buyers during the summer holiday season. This dip in activity among institutional investors has, as per the analysts, bolstered the selling pressure on Bitcoin (BTC).
The analysts emphasized the decrease in corporate acquisitions during the holiday period as a key factor contributing to the price slump in Bitcoin. They further noted that long-term investors had been capitalizing on Bitcoin profits, which, in conjunction with other negative influences, exacerbated the selling pressure.
“The absence of fund managers, who were on summer break, intensified the selling pressure and subsequently led to a drop in market liquidity. Furthermore, insights reveal that long-standing Bitcoin investors (holding for 3-4 years), the German government, and Mt. Gox have been offloading their holdings, thereby exerting additional downward pressure on BTC prices,” shared the Bitfinex analysts.
Shift in Bitcoin Miners’ Strategy from Selling to Hodling
In addition to the insights from Bitfinex analysts, chief analyst Ryan Lee from Bitget weighed in with significant observations. Lee linked Bitcoin’s recent underperformance to various factors, including activities in Germany, the USA, and the Mt. Gox proceedings. He highlighted that the selling pressure from miners had subsided, pointing out that miners were now opting to retain their Bitcoin holdings rather than liquidate them.
“Given the current Bitcoin price, certain mining rigs are no longer profitable. This shift may alter the trading behavior of BTC miners, leading them to prioritize holding onto their Bitcoins over selling them. Consequently, this can alleviate the potential selling pressure originating from miners,” Lee noted.
*Please note that the above content does not constitute investment advice.
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