Three Main Reasons for Bitcoin's Decline: CryptoQuant's Data

In recent days, the price of Bitcoin has dipped below the 100 thousand dollar level, raising concerns among investors. To explain this situation, a CryptoQuant analyst identified three main sources. The analysis clearly highlights the underlying challenges behind market volatility.

The first point sheds light on how liquidity stress based in the US affects the markets. The Coinbase Premium Index has remained consistently in negative territory in recent weeks, indicating that Bitcoin is being traded at lower prices on the US-based Coinbase exchange. This situation suggests that American investors are more aggressively selling compared to their Asian and European counterparts. As a result, while Bitcoin shows recovery in Asian markets during night hours, it faces rapid selling pressure upon the opening of US markets.

Secondly, the selling activities of long-term holders (LTH) stand out. The CryptoQuant analysis indicates that this situation is not limited to a specific period; Bitcoin holdings that have been held for 6 months, 18 months, 3 years, and 7 years are being sold simultaneously. Data from Fidelity also supports that long-term investors in the US are realizing profits for tax optimization purposes as the year-end approaches.

The third factor is the liquidity crunch caused by the shutdown of the US government. The temporary halt of federal expenditures has led to billions of dollars being pulled from the markets, and with the formation of a federal budget surplus, liquidity has tightened even further. Additionally, the weakening expectations for interest rate cuts in December have seriously pressured risk appetite in the US. This situation has caused losses of 10-20% in crypto-related stocks alongside the decline in US stock markets, with Bitcoin exhibiting a similar downward movement.

Considering all these factors, there are many developments that Bitcoin investors need to closely monitor. Particularly, market liquidity, the selling tendencies of US investors, and long-term investor behaviors are of critical importance for future price movements.