Cryptocurrency analyst Willy Woo shed light on Sunday on why Bitcoin’s (CRYPTO: BTC) price is not rising as quickly as expected, attributing it to the selling patterns of early investors.
Early Bitcoiners Hold The Key
In an X post, Woo highlighted that Bitcoin’s supply is concentrated among “OG whales” who peaked their holdings in 2011.
“They bought their BTC at $10 or lower. It takes $110,000+ of new capital to absorb each BTC they sell,” Woo said.
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Woo emphasized that the difference in cost basis, i.e., the price at which they acquired BTC, the supply they hold and their rate of selling significantly impacts the amount of new capital needed to elevate the price.
“You can look at this as BTC going through growing pains until these 10,000x gain investors are absorbed,” the analyst added.
The Counter-Argument
A Bitcoin advocate, known by their pseudonym Parman, presented a contrasting viewpoint, arguing that the early holders from 2011 are unlikely to sell large portions of their holdings and keep billions in cash.
“They’ll sell a little, maybe 10 mil, tops. There aren’t enough of them for this to make a big impact,” they added.
Bitcoin To Rebound In September?
Woo’s analysis comes in the wake of a recent flash crash that saw Bitcoin’s price drop from $114,000 to $110,000 within minutes after a whale liquidated 24,000 BTC, valued at over $2.7 billion. The slump reversed the positive impact of Federal Reserve Chair Jerome Powell’s dovish remarks at the Jackson Hole symposium.
Bitcoin has meandered sideways over the last five weeks or so, with its market share dropping from 61% to 56.9%.
Anthony Pompliano, the founder and CEO of Professional Capital Management, said that Bitcoin’s pullback signals a maturing market with muted volatility and increased institutional participation. He predicted Bitcoin to “come back alive again” in September, suggesting that the current price of $113,000 is “pretty oversold.”
Price Action: At the time of writing, BTC was exchanging hands at $113,002, down 1.82% in the last 24 hours, according to data from Benzinga Pro. Year-to-date, the coin has rallied nearly 20%.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
