Bitcoin falls again, who is selling Bitcoin?

Today, Bitcoin once again experienced a 10% intraday drop, and investors' feelings were once again abused.

From the perspective of trading logic, the 15-minute line has fallen sharply in a short period of time. In addition to the fixed-point explosion of the contract, there must be a quick sell order in the spot. So who is selling Bitcoin?

This is a more interesting question because it represents the sellers' judgment on this time period.

The biggest selling news recently came from the British asset management company Ruffer.

According to Golden Finance, British asset management company Ruffer has sold all its Bitcoin positions at the end of April, making a net profit of more than $1.1 billion in 5 months. The company said that part of the reason for selling Bitcoin positions is that young people will not spend so much time trading Bitcoin now that the epidemic lockdown is about to end. The company initially invested about $600 million to buy Bitcoin in November last year. By the time the last batch of positions were sold in April, the total profit was slightly more than $1.1 billion.

This is the largest sell-off we have seen so far, and it is up to the end of April.

The big drop occurred in May and later.

Recently, the data on the Bitcoin chain shows that the chain is very "quiet". According to CoinMarketCap data, Bitcoin transaction fees are plummeting, with the average fee dropping from $53 to $7, a drop of 87%. In addition, as of June 6, the average daily number of active addresses on the Bitcoin network has dropped to 940,000, which is equivalent to the level in May; the average daily number of new addresses has also dropped to 372,000, returning to the level in March.

However, the recent selling pressure may come from miners. According to analysis data from CryptoQuant and Glassnode, Bitcoin miners' sales have increased. For example, on June 3, the largest amount of Bitcoin outflow from the Poolin mining pool wallet was 3,271 (about $119.9 million).

As for today's drop, there are some other speculations. It is reported that around 05:15 this morning, Bitcoin suddenly plunged, falling by more than $2,000 in a few minutes, breaking below $34,000 per coin, and falling by more than 5% within the day. At the same time, Ethereum fell below $2,600 per coin. Some people suspect that the U.S. Department of Justice sold the Bitcoin they recently recovered, causing the sudden drop in Bitcoin. Previously, the U.S. Department of Justice also stated that it was raising the investigation of ransomware attacks to a similar priority as terrorism cases.

According to CryptoCompare’s May 2021 Exchange Review report, open interest in BTC products decreased by 25.8% during the same period.

On June 8, according to a report by digital asset management company CoinShares, investors redeemed a net of $141 million from Bitcoin funds in the seven days ending June 4, the highest weekly total on record. The amount accounts for about 8.3% of the net inflows recorded earlier this year. The total digital asset fund saw a total net outflow of $94 million last week.

This is all caused by the previous plunge and panic selling, but the essential reasons reflected in the previous data are interesting, just like Bitcoin analyst PlanB said on June 6 that institutions are deliberately suppressing the price of Bitcoin to accumulate cheap BTC. He said that the price trend of Bitcoin in the past few months shows that someone is trying to influence the market behind the scenes. "Looking at the daily charts of the past few months, you will see that after these panic selling occurred, all the Bitcoin sold was bought within a week or two. To me, this is a sign of institutional buying."

The Bitcoin Conference in Miami has just ended, and the belief in Bitcoin is still quite clear. For example, MicroStrategy currently predicts an impairment loss of at least $284.5 million on its Bitcoin investment. But it is still considering buying more Bitcoin.

On June 7, MicroStrategy announced that it would offer $400 million worth of senior notes to qualified institutional buyers in accordance with the provisions of the Securities Act and subject to market and other factors. The bonds have a term of seven years and can only be repaid after three years. The net proceeds from the sale of the notes will be used to purchase more Bitcoin.

Later, another person familiar with the matter revealed that Microstrategy was negotiating with investors for a junk bond issuance yield of 6.25% to 6.5% to provide funds for its purchase of more Bitcoin. This is the first time in history that a company has issued junk bonds to buy Bitcoin.

Since the announcement of MicroStrategy’s decision, confidence at the market level has risen again. From the perspective of price analysis, it has not yet reached the stage of effective decline. The big drop in the middle of the bull market requires more patience to observe the market outlook.

Yesterday, according to the analysis of Golden K God, in this year's bull market, BTC's trend is similar to the previous two rounds, and it also rose all the way to a high of 64,850 US dollars before a major adjustment, and fell to the lowest level of around 30,000 US dollars, which is also the 1.618 trend support area. After touching it, it quickly rebounded and did not effectively break below. A strong adjustment does not mean the end of the bull market. The previous two rounds of adjustments were not small. The adjustment was a strong wash after the completion of the first stage of the bull market, preparing for the subsequent second stage. At present, in the absence of an effective break, don't be blindly pessimistic. In the future, we need to observe whether BTC can stop falling and stabilize in this area and build a bottom and strengthen. Be more patient and it will take time.