Bitcoin is experiencing main correction regardless of excessive web spot ETF inflows. Crypto analyst Willy Woo has shared his tackle the latest BTC price drop. In his latest put up on X, he offers some insights into the present Bitcoin sell-off and why its price doesn’t correlate with constructive BTC ETF dynamics.

Who’s promoting?

Woo factors out that whereas ETFs and establishments are actively shopping for BTC, focusing solely on ETF flows is flawed. The first sellers, based on Woo, are the “OGs” — unique BTC holders. These early adopters possess considerably extra BTC than all ETFs mixed, they usually are inclined to promote throughout each bull market.

The chart reveals a recognizable sample that reveals up throughout bull runs each cycle.

Paper is every part

The introduction of paper BTC via futures markets since 2017 has considerably altered market dynamics. Paper BTC permits merchants to purchase artificial BTC with out holding precise BTC, which diverts direct demand away from actual BTC.

Prior to now, Bitcoin’s price surged as a result of solely long-time holders and miners offered BTC. Nevertheless, the 2022 bear market was influenced by a flood of paper BTC, regardless of minimal promoting by spot holders. Woo notes that present circumstances present intervals the place a rise in paper BTC doesn’t result in a price rally, highlighting the affect of artificial BTC.

Associated

Woo argues that understanding BTC’s market dynamics requires analyzing on-chain information, derivatives information and technical price motion.

Thus, focusing solely on ETF shopping for is inadequate; a broader view is important to seize the total demand and provide image.