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What Factors are Affecting Bitcoin’s Price Stability? Insightful Reasons Unveiled by Bitfinex Analysts
Why Is Bitcoin Not Reacting? An Intriguing Revelation by Bitfinex Analysts!
Bitfinex experts have attributed the muted response in Bitcoin’s price to the decline in institutional investments observed during the holiday season.
By:
Elif Azra Güven
05.07.2024 – 18:47
Latest Update:
11 hours prior
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Following a lackluster week marked by a descent, Bitfinex analysts have dived into a fresh study to identify the underlying causes behind Bitcoin’s downward trajectory.
In a conversation with The Block, analysts at Bitfinex pointed out that a drop in market liquidity has stemmed from decreased participation by institutional players amidst the summer break.
The analysts highlighted that the reduced engagement from institutional investors has bolstered the selling pressure on Bitcoin (BTC).
Expressing their stance, the Bitfinex analysts emphasized that the dwindling corporate activity during the holiday season has fueled the plunge in Bitcoin’s value. They also noted that seasoned investors have been capitalizing on Bitcoin profits, which, coupled with other negative catalysts, have amplified the selling strain.
“The absence of fund managers during the summer break has heightened the selling pressure, leading to a liquidity crunch in the market. Additionally, the data suggests that long-time Bitcoin investors (spanning 3-4 years), the German authorities, and Mt. Gox are offloading due to persisting selling stresses,” elucidated the analysts. “Collectively, these factors have further depressed the BTC price.”
Transition in Bitcoin Miner Behavior: From Selling to Holding!
Apart from the insights shared by Bitfinex analysts, notable statements were also provided by Ryan Lee, the chief analyst at Bitget.
Lee, attributing Bitcoin’s recent lackluster performance to various factors, including actions by Germany, the USA, and Mt. Gox, highlighted a decline in selling pressure from miners.
Acknowledging that miners are now inclined towards hoarding their Bitcoins rather than selling them, Lee pointed out, “With the current Bitcoin price, some mining operations are losing profitability. This shift might influence the trading conduct of BTC miners. Consequently, miners appear more predisposed to retaining their Bitcoins rather than divesting them. Consequently, this move alleviates the potential selling pressure arising from miners.”
*This content does not constitute investment advice.
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