Wealthy Investors Continue BTC Selloff

However, more inexperienced investors have become long-term Bitcoin holders, limiting sell-side risks to less than $30,000. According to on-chain analyst Willy Woo, Bitcoin (BTC) could experience one last bear market capitulation; it should happen if whales increase their selling pressure.

Woo calculated the average price at which short-term investors entered the Bitcoin market throughout history; he plotted the daily value change. It resulted in a cost basis, which is a metric that indicates when “inexperienced” traders sell BTC to “experienced” traders during a BTC free fall, which usually coincides with the market bottom.

The chart below shows that the cost basis experienced significant drops during previous bear markets before solid accumulation. Surprisingly, Bitcoin’s ongoing correction has not resulted in a significant drop in the currency’s cost basis.

Woo’s prediction appeared to be in line with growing speculation about Bitcoin’s next significant drop. For example, Christopher Yates, editor at AcheronInsights, made a prediction; according to him Bitcoin’s price could fall to $30,000 due to the “deteriorating macro environment.”

Ecoinometrics, a data resource, provided evidence of the demand gap; it is between small and wealthy Bitcoin investors in its most recent weekly report. It noted, for example, that addresses holding up to 10 BTC have been accumulating the coins over the last 30 days.

BTC Is the Most Deflationary in History

Meanwhile, another metric known as the “LTH Inflation/Deflation ratio,” according to ARK Invest on-chain analyst David Puell, corroborates the theory above.

In detail, Bitcoin inflation indicates that LTH is releasing their BTC faster than the natural sell-side of miners. Deflation, on the other hand, implies that LTHs have absorbed a proportional amount of the miner sell-side every day, together with the outstanding total supply.