Bitcoin Whales Trigger Selling Pressure in the Market

Bitcoin Whales Trigger Selling Pressure in the Market

Price fluctuations are prevalent in the world of Bitcoin. Indeed, one of the most common patterns in cryptos is seeing prices fall and then bounce back up. Liquidity cleansing is a phenomenon that exists not only in Bitcoin but in most financial markets as well. It usually begins when Bitcoin’s large holders, also known as whales, begin transferring most of their Bitcoin to exchanges. This transfer of money is actually called selling pressure.

Detecting Selling Pressure in #Bitcoin with CDD Data and Its Impact on Prices

“Without breaking this pressure, new uptrends won’t emerge. The last high CDD data in the spot markets was on April 24th.” – By @theKriptolik

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— (@cryptoquant_com) April 29, 2024

Long-Held Bitcoin Movement Signals Selling Pressure

When a substantial amount of Bitcoin is being sold in the market, it is referred to as selling pressure. Selling pressure causes prices to be temporarily suppressed from moving upwards and can even cause them to fall slightly. The movement of long-held Bitcoins by investors is usually a market signal that some investors are trying to cash out, contributing to selling pressure.

CDD data is one method of measuring selling pressure activity in the Bitcoin market. Coin days destroyed data relates to Bitcoin that has been held for an extended period and is withdrawn from storage. When long-held coins are withdrawn, this typically indicates that there is some form of selling pressure in the environment.

Increased Selling Pressure on April 24th Impacts Bitcoin Prices

Examining the activity on April 24th as shown in the CDD image by CryptoQuant, one will notice a large spike of coins days destroyed. In other words, a considerable amount of Bitcoin was withdrawn from storage on April 24th, contributing greatly to selling pressure. When selling pressure increases, prices are less likely to go up because it puts too much pressure on prices.

Ultimately, to see prices start going up again, selling pressure must decrease. As a result, this puts less pressure on price movements and makes it much easier for prices to surge, perhaps signaling the start of a new upward trend.

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