Why Bitcoin Is Falling Behind Nasdaq: Insights Revealed

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As a long-term Bitcoin investor with experience in the crypto market, I find the recent price volatility concerning. The divergence between Bitcoin’s performance and the Nasdaq Composite Index is a red flag, as Bitcoin has historically had a positive correlation with tech stocks.

In the past week, Bitcoin (BTC) has experienced a decline of over 6%, contrasting the typically favorable relationship it holds with the Nasdaq Composite Index.

The Fed has indicated that it will likely raise interest rates just once more in 2021, a move that typically influences investments like cryptocurrencies. This decision could potentially dampen investor confidence in Bitcoin.

Markus Thielen of 10x Research posits that significant selling in a particular market price range is predominantly influenced not by outside factors or stories, but rather by the belief among major sellers that the prices have grown excessively high at those moments.

Long-term Bitcoin investors may be tempted to offload their holdings around the November 2021 peak of approximately $70,000, according to Thielen’s observation. This selling point arises due to these investors believing it is an ideal time to realize substantial gains at elevated prices.

Significantly, a wallet that hadn’t been active since 2018 recently moved 8,000 Bitcoins (equivalent to over $500 million) to the cryptocurrency exchange Binance. Such transactions are often seen as indicators of upcoming large-scale sales, suggesting that long-term investors could be cashing out at present prices.

As a crypto investor closely monitoring market trends, I’ve noticed some intriguing data from CryptoQuant. The number of Bitcoin (BTC) coins that have been inactive for 12 months and 24 months is decreasing. This could indicate that holders are choosing to sell their coins, possibly taking profits near record-high prices.

Ilan Solot from Marex Solutions observes that Bitcoin addresses with no activity for 1-2 years have been selling off since price peaks, thereby balancing out the buying behavior of long-term investors. Thielen points out that approximately 1.8 million Bitcoins have remained inactive for a decade, and he anticipates that some Mt. Gox creditors will exchange their Bitcoin for fiat currency by the end of 2024.

As a financial analyst, I would describe it this way: Mt. Gox, the notoriously failed cryptocurrency exchange from 2014, is planning to disburse approximately 142,000 Bitcoins and 143,000 Bitcoin Cash to its creditors between October and November in the year 2024. This mass distribution could potentially create a ripple effect on the market if these creditors opt to sell their newly acquired assets upon receipt.

Bitcoins are being offloaded more frequently by miners. For instance, Marathon Digital disposed of 1,400 Bitcoin, worth approximately $98 million, during this month. Moreover, there have been reports of over 1,200 BTC being sold in a single day through private deals, suggesting substantial selling pressure within the mining community.

The computational power dedicated to the Bitcoin blockchain, as measured by hashrate, has experienced a recent decline. This drop, from 622 exahashes per second (EH/s) to 599 EH/s, may be indicative of miners either selling out or decreasing their mining activities due to a multitude of reasons including regulatory pressures and increased operational costs.

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2024-06-14 20:05