The ongoing downturn has divided analysts about whether the bull trend will resume once liquidity improves or if markets face the next bear cycle.
Bitcoin News
Bitcoin transferring from long-term holders to newer market participants will cause future drawdowns to intensify, according to gold investor and economist Peter Schiff.
Schiff stated on Saturday that Bitcoin is "finally having its IPO moment" as sufficient liquidity now exists for original holders to exit positions. He warned that "this much Bitcoin moving from strong to weak hands not only increases the float, but also means future sell-offs will be bigger."
Long-term holders and whales dumped over 400,000 BTC in October, contributing significant selling pressure that pushed prices below $85,000. The ongoing downturn has divided analysts about whether the bull trend will resume once liquidity improves or if markets face the next bear cycle.
BTC exchange inflow, which tracks coins sent to exchanges for selling, remains elevated according to CryptoQuant data. The metric suggests continued distribution from holders looking to exit at current price levels.
Owen Gunden, one of the earliest BTC holders, sold his entire stash of 11,000 coins valued at roughly $1.3 billion during October and November. Robert Kiyosaki, author of "Rich Dad, Poor Dad," announced Friday he sold all his BTC holdings valued at approximately $2.25 million.
Kiyosaki stated he purchased Bitcoin at around $6,000 per coin and exited near the $90,000 level. He plans to funnel profits into income-producing businesses, adding, "I am still very bullish and optimistic on Bitcoin and will begin acquiring more with my positive cash flow."
Analysts at crypto exchange Bitfinex identified strong selling pressure from long-term holders cashing out and leveraged liquidations as the main factors driving the short-term drawdown. They stated Bitcoin fundamentals remain strong and attractive to institutional investors, who will continue adopting the asset and driving demand.
Retail investors will likely sell their Bitcoin at the first sign of trouble, Vineet Budki, CEO of venture firm Sigma Capital, told Cointelegraph. He predicts that this lack of conviction among retail participants will drive a 70% price drawdown in the next bear market. The divergence between institutional accumulation and retail distribution could determine whether current volatility represents a temporary correction or marks the beginning of an extended downturn for crypto markets.
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