The market is constantly buying, and institutions are also buying. Who is selling? In addition to the overall supply and demand relationship, the futures market is also one of the key influencing factors.
Written by Willy Wo
Compiled by: 1912212.eth, Foresight News
The inflow of Bitcoin spot ETF shows that the market is constantly buying, and institutions are also buying, but the market trend seems to be going in the opposite direction, and it keeps falling. Who is selling? Entering 2024, market participants began to focus more on the inflow and outflow of Bitcoin spot ETF, as if these data have become the key to insight into the real dynamics of the market.
What matters is aggregate demand and aggregate supply.
First, let me tell you who is selling. OG is selling, they own 10x more BTC than all ETFs combined. They sell every bull run. This pattern has been around for as long as the Genesis Block of Bitcoin.
To understand this phenomenon more intuitively, we can refer to the following figure: coin age x number of coins sold. This chart reveals OG's selling behavior in the market and its impact on market trends.
We are now in the "modern era" of Bitcoin. Since 2017, "Paper BTC" (referring to not real BTC) has begun to flood the market.
The futures market is also one of the key factors affecting market trends.
In the past, if you wanted to buy coins, you had to buy real BTC. In recent years, you can buy so-called paper BTC. This means that people who don't have real coins can also sell you that piece of paper.
Together you created synthetic Bitcoin.
This latent demand for BTC is shifted to paper BTC, which is met by counterparty traders who have no BTC to sell and only USD to stake.
In the past, Bitcoin’s price was able to grow exponentially because the only sellers were small sales from early holders and small amounts of newly mined coins sold by miners.
Now, you should pay more attention to the magic of "paper BTC".
The 2022 bear market was caused by the proliferation of “paper BTC” when in fact real spot holders were not actually selling.
During the current bull run, I have marked periods of increased paper BTC that were not accompanied by an increase in price.
We are at such a stage now.
Therefore, simply focusing on ETF purchases is not enough to fully grasp market trends. It is also necessary to pay attention to factors such as on-chain data, derivative data, and technology price trends.
All of these factors add to the complexity of demand and supply.
Analyzing them together is more of an art than a quantifiable science.
In this volatile market, everyone is just making logical guesses.
