Markets
This is why the price of Bitcoin (BTC) is decoupling from the Nasdaq
Bitcoin (BTC) fell more than 6% in seven days, departing from its usually positive correlation with the tech-heavy Nasdaq Composite stock market index.
While the popular narrative attributes bitcoin’s fall to the Federal Reserve’s decision to signal just an interest rate cut in the United States For the rest of the year, tech stocks extended gains following Wednesday’s decision, indicating that cryptocurrency-specific factors may prevent BTC from keeping pace with the Nasdaq.
“When a market continues to sell off at a specific level, it has less to do with events, narratives or fundamentals. Instead, a big seller perceives that prices are overvalued at that level,” said Markus Thielen, founder of 10x Research. . “The November 2021 all-time high of nearly 70,000 is a level where long-term holders are willing to sell their Bitcoin, as they are the most likely candidates to cash out.”
Earlier this week, an inactive wallet since 2018 moved 8,000 BTC worth over $500 million on the Binance cryptocurrency exchange. Moving from a wallet to an exchange is often a signal of an impending sale. The wallet reportedly acquired BTC at less than $4,000.
Data tracked by analytics firm CryptoQuant shows the number of BTC idle for at least 12 months and two years has fallen, a sign that holders have been taking profits as bitcoin’s price nears record highs.
“Addresses with inactive supply for 1 and 2 years are sold since the price reached record levels. This compensates for accumulation by long-term holders (+3 years),” Ilan Solot, co-head of digital assets at Marex Solutions, he said in an email Wednesday.
According to Thielen, 1.8 million BTC has not moved for over a decade, including potentially 1.1 million BTC mined by Satoshi himself. “This is why we would also expect most Mt. Gox holders to convert their BTC to fiat once they take ownership in October/November 2024,” Thielen noted.
Mt. Gox, a cryptocurrency exchange that imploded due to a cyberattack in 2014, is oriented towards distribution 142,000 bitcoins (BTC) worth approximately $9.5 billion and 143,000 bitcoins in cash (BCH) worth $73 million to creditors, CoinDesk reported in April. A distribution could result in a substantial increase in digital asset prices. The trustees of the defunct stock exchange last year set to a deadline of October 31, 2024 to repay creditors.
Another reason for the weakness of the BTC price could be increased sales by miners or coin creators. Miners receive BTC as a reward for approving blocks on the blockchain and additional revenue from user transaction fees.
Listed miner Marathon Digital (MARA) has sold 1,400 bitcoins worth $98 million this month. According to CryptoQuant, miners sold at least 1,200 BTC via OTC desks on June 10, the highest daily volume in over two months.
The hashrate, or the computing power dedicated to the Bitcoin blockchain, dropped from 622 exahash per second (EH/s) to 599 EH/s this month. This is a sign of capitulation of the miners.