Last week marked a notable shift in the dynamics of the crypto market. Bitcoin (BTC) lost over 6% of its value, and U.S. spot Bitcoin exchange-traded funds (ETF) broke their 20-day inflow streak with outflows running into hundreds of millions of dollars.

According to the latest Bitfinex Alpha report, bitcoins plunge was mainly caused by selling from long-term holders, whales, and miners on exchanges and via over-the-counter transactions.

Selling Pressure From LTHs and Whales

Long-term holders often sell their holdings gradually during bull cycles, especially when the market is in consolidation, which is the current phase. This cohort of investors was responsible for most of the selling pressure last week, outpacing the spot ETFs by far.

The Hodler Net Position Change metric, which tracks long-term bitcoin investors monthly position changes, indicates how intense the selling pressure is. When long-term holders are selling, this metric turns negative, and when they are buying, it turns positive. The indicator has been consistently negative for the past nine days.

Besides long-term holders, whales have also been busy. The ratio of the top ten inflows into exchanges as a proportion of total inflows has increased, indicating that a large quantity of BTC is being deposited on trading platforms via whale wallets, most likely in preparation for sale.

While the crypto markets selling is on a smaller scale than previously observed in April, Bitfinex analysts said it highlights the influence of long-term holders on BTC market dynamics. In addition, it serves as a reminder that long-term holders and whales are still collectively the largest cohort of bitcoin holders, surpassing the spot ETFs. The decisions of these investors can affect liquidity and price movements during critical market phases.

Miner Reserves Deplete

Furthermore, miner BTC reserves fell sharply last week following a steady decline from before the Bitcoin halving.

The peak in BTC around March 2024 corresponds with a significant decline in miner reserves, suggesting that miners were selling off their reserves to capitalize on high prices. This was common at that point of time as miners were also selling reserves to prepare for the Bitcoin halving to realize investment needed to upgrade machinery and operations, Bitfinex stated.

Analysts assume that miners are still struggling to maintain operational efficiency as their block rewards have been reduced. They are contributing to the current selling pressure, and their reserves have fallen to four-year lows.