Bitcoin: Assessing BTC’s performance since ETF approval
- BTC’s price has dropped by 15% since the ETF approval.
- The coin’s long-term holders have gradually reduced their exposure.
In a series of posts on X (formerly Twitter), data provider IntoTheBlock highlighted some of Bitcoin’s [BTC] on-chain activity in the past week.
Bitcoin in the last seven days
According to IntoTheBlock, the coin’s price plunged by double digits as it lost 10% of its value in the past week. While many expected sustained price growth post-ETF approval, the opposite has happened.
1/ Bitcoin prices decreased about 10% in the past week, and even more since the approval of the Bitcoin ETF. Many expected the opposite. So let’s take a look at what’s going on with $BTC 👇 pic.twitter.com/q61CnAhuiO
— IntoTheBlock (@intotheblock) January 19, 2024
After BTC’s price peaked at $48,625 on 11th January, its value has since plummeted. The coin traded at $41,548 at press time, according to CoinMarketCap data. This marked a 15% decline in value in the last nine days.
The decline in BTC’s value in the past week has been partly due to a rise in its inflows into centralized exchanges. When an asset sees a spike in exchange inflows, it suggests that selling momentum is high.
According to IntoTheBlock, in the last week, BTC recorded its sixth consecutive week of inflows into exchanges. Since December, BTC’s net deposits into exchanges have been nearly $2 billion.
Assessing which cohort of BTC investors have sold their holdings the most in the last week, IntoTheBlock considered the average holding time of transacted BTC coins.
This metric, which reached an all-time high on 15th January and the second-highest weekly average, suggested that older coins, presumably held for longer periods, have entered into circulation.
According to IntoTheBlock, this movement “could be the result of people exiting GBTC,” probably due to the lean premium on the trust.
Long-term holders take a step back
However, despite the double-digit price fall in the past week, BTC whales have continued to accumulate the king coin.
BTC wallet addresses with a balance exceeding 1000 BTCs “have added to their wallets and those with fewer than 1k $BTC decreased their holdings in January,” IntoTheBlock added.
As the coin trades below $42,000, its short-term holders (those who held the coins for less than 12 months) have gradually reduced their holdings.
Interestingly, due to the coin’s reaction post-ETF approval, BTC long-term holders “haven’t been buying as strongly as they’ve done in the past months,” IntoTheBlock found.
Read Bitcoin’s [BTC] Price Prediction 2024-25
In the last month, the supply of BTC held by this group of investors has dropped by -0.38%.
Commenting on the significance of this, IntoTheBlock said the minor decline in long-term holdings and an MVRV ratio of 1.88 suggests that the king coin may be experiencing a “temporary setback” and is yet to commence the real bull cycle.