CryptoQuant touched upon four different factors behind Bitcoin (BTC)’s decline to $40,400.
The cryptocurrency market experienced painful activity at night. Last night, BTC retreated to $40,400 with a sharp selling pressure and bearish candle. With the withdrawal of BTC, there was activity in the crypto market. Following the crash, $400 million was liquidated from the crypto market. Those who opened long (bullish) transactions were mainly involved in the liquidations.
On the other hand, as BTC rose to $40,400, panic sales occurred in altcoins. Many altcoins followed BTC, dropping between 5 and 10 percent.
On-chain data researcher CryptoQuant listed four factors behind the BTC decline that crypto investors are curious about.
What Data Changed Before The Price Correction?
1. SSR hits a 2-year high
2. Mara Pool's Distribution
3. 50%+ Circulating Bitcoin Supply in Profit
4. Long Term Holders' ResistanceThe majority of the latest Quicktake posts flagged #Bitcoin price correction.
Thread🧵 pic.twitter.com/PDIFoMQNGO
— CryptoQuant.com (@cryptoquant_com) December 11, 2023
Factors behind BTC decline
Bitcoin (BTC)’s sudden decline to $40,400 stirred up the crypto market. On-chain data researcher CryptoQuant touched on the reasons behind the decline.
CryptoQuant listed the reasons behind the decline on the X platform. In the post made by the on-chain researcher, the data that changed before the price drop was discussed.
According to CryptoQuant, the reasons behind the BTC decline were the stablecoin supply ratio (SSR), profit selling by miners, more than 50 percent of the circulating BTC supply being in profit, and long-term BTC holders reaching the resistance level.
The first of the data, the SSR rate, reached its highest level in 2 years. A high SSR ratio indicates that BTC has higher value compared to stablecoins and market participants are shifting towards BTC. This data, which is shown as one of the factors behind the decline, signals that the return to stablecoins may now begin.
In other data, CryptoQuant evaluated miners’ sales as follows; “The decision to distribute some of its positions after the recent peak probably suggests a strategic measure aimed at optimizing gains and reducing risks.”
According to CryptoQuant, in the sales referred to as Mara Pool’s Distribution, miners may have sold the BTCs they held on hold due to the price reaching its peak.
The on-chain researcher addressed profitability as the third driver of decline. CryptoQuant pointed out that the sales may have come because more than 50 percent of the BTC supply in circulation is profitable.
CryptoQuant’s latest data was the increase in the number of long-term BTC investors. This data means that investors who have been holding BTC for a long time want to make a profit from their assets against a possible correction.
