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Here’s What’s Driving the Current Bitcoin (BTC) Correction, According to On-Chain Analyst Willy Woo – The Daily Hodl

Popular on-chain analyst Willy Woo has analyzed what is driving the current Bitcoin (BTC) decline.

Wu told his 1.1 million followers on social media platform X that Bitcoin OGs, or early, long-term BTC holders, are selling off their holdings in large numbers.

The analyst shared a chart showing that BTC’s coin destruction days metric is spiking, suggesting that long-dormant coins are moving to cryptocurrency exchanges where they can presumably be sold on the open market.

“First, let me tell you who is selling. OG. They are selling. They own more BTC than all ETFs combined… 10x. And they sell during every bull market. This pattern is as old as the genesis block.”

sauce: Willy Woo/X

While long-term holders are selling off some of their bitcoins, To tell The sell-off has been exacerbated by the futures market, or what he calls “paper BTC.”

“Since 2017, paper BTC has flooded the market. It’s the futures market. If you wanted to buy BTC, before you had to buy real BTC. Now you can buy paper BTC, which means people who don’t have the coins can sell the paper. These are what combined to create synthetic BTC.”

That latent demand for BTC gets diverted into paper BTC and met by counter traders who have no BTC to sell and only have USD to back their stakes.

Back in the day, BTC would have risen exponentially in value because the only sellers were a small amount from OG and an even smaller amount from miners with newly mined coins. Today, the focus is on the magic of paper BTC.”

Wu shared a chart showing that while spot market BTC supply has been trending downward over the long term, paper BTC supply has been trending upward.

“The 2022 bear market was dictated by a massive influx of paper BTC at a time when spot holders did not actually sell. The current bull market has marked places where paper increased, but this is a time when the price did not rise. We are in one of those times right now.”

sauce: Willy Woo/X

At the time of writing, Bitcoin is worth $66,286.

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Disclaimer: Opinions expressed on The Daily Hodl are not investment advice. Investors should do their due diligence before making high-risk investments in Bitcoin, cryptocurrencies and digital assets. Transfers and transactions are at your own risk and you are responsible for any losses incurred. The Daily Hodl does not recommend buying or selling cryptocurrencies or digital assets and is not an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

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