As we approach the weekend of December 6-7, Bitcoin’s decline continues to deliver pain to investors, even when the stock markets are doing well. The primary cause of this ongoing decline has been the sales from older investors. Nevertheless, various adverse developments, including FUD surrounding MSTR and discussions about interest rate hikes in Japan, have also been observed. The question remains whether the sales from long-term holders have subsided.
Long-term Cryptocurrency Investors
These investors played a significant role in the price fluctuations of BTC on the on-chain side. They conducted excessive sales, and the accelerated decline was their conversion to cash combined with high leverage. Amid a generally unenthusiastic investor sentiment driven by negative news, continuous sales drove prices further down. Currently, Bitcoin 
$77,293 struggles to stay above $90,000, having made several attempts to reach $80,000.
The good news is that while Bitcoin isn’t rising, the older investors are nearing exhaustion. As noted by CryptoQuant analyst Darkfost, an on-chain chart tracing investors with holdings older than five years confirms this observation. In essence, numbers tell the story.
“The sales activities of old Bitcoin investors (OGs) have significantly decreased in recent weeks. The 90-day daily average was about 2,350 BTC, but the spent UTXOs of these OGs have now returned to a more normal level, averaging around 1,000 BTC.”
“This chart accounts for only UTXOs older than five years, initially corresponding to BTC purchased around $30,000. Tracking spent UTXOs gives us an idea of the sales pressure from these long-term holders. When such old BTC begins to move, it is usually about to be sold. When we see a UTXO’s BTC move, we call it ‘spent,’ and these are the movements we track here.”
“Ultimately, the data indicate that the sales pressure from OGs has decreased, providing the market with some breathing room. It is important to note that as the cycle progresses, the sales pressures have lessened, and the STXO peaks of these OGs (90-dma) have been decreasing steadily.”
Regardless of fluctuations due to the news flow, staying up to date is crucial these days. Keeping track of information is potentially facilitated by tools like CryptoAppsy.
Why Aren’t Cryptocurrencies Rising?
The $81,000 mark is a crucial area for Bitcoin, which is not a coincidence. The realized price, representing the market’s average cost, sits precisely at this level. Analyst OnChainMind created a new cost metric by focusing on the trading market (excluding dormant supply) to find the true market average. This reflects the active market’s cost, making Bitcoin gravitate towards this equilibrium point. Currently, as we are holding above it, bulls still have an advantage.
What is the situation with capital inflow? Although not as rampant as at the start of the year, the flow remains positive. Looking at the ETF channel, a net inflow of $22 billion provides a considerable balancing influence. Historically, bear markets saw nearly everyone selling, turning capital inflows negative, and causing widespread upheaval. It is at this point that we realize that past bear markets are behind us, and we need to adapt to the new era.
One of the necessities for cryptocurrencies was leverage cleaning. When funding rates are too high, we witness significant fluctuations to remove those taking excessive risks. This is the balancing of leverage. We have generally seen long positions experiencing this fate for weeks. This cleanup is needed for the market to move more healthily.
What we need most is to wait for the volatility to balance out. The initial three topics mentioned above are positive. Now, the final piece of the puzzle needs to be completed. Either after a deeper drop, Bitcoin will take a break, halting extreme movements, or it will linger at current levels. Time will tell what unfolds.
