Here's what could be causing Bitcoin's correction

Popular analyst Willy Wu has blamed the current Bitcoin (BTC) selloff on early long-term holders, referred to as "BTC OGs."

He revealed that these holders are selling off their holdings with a remarkable increase of “the destroyed days of BTC tokens', which is a metric signaling the movement of inactive coins that are most likely to be sold on exchanges.

Wu explained that OGs own more BTC of all exchange-traded funds (ETFs) combined, and historically they tend to sell during bull markets, a pattern he's observed since Bitcoin's genesis block.

Moreover, in addition to selling pressure from long-term early holders, futures markets have also played a role in amplifying such market dynamics.

He pointed out that with the passage of time since 2017; there was an influx of "paper BTC', which are essentially synthetic derivatives as opposed to real Bitcoin tokens. Instead of using actual BTC, this flow of paper tokens diverts demand away from them, with traders using US dollars rather than actual Bitcoin tokens.

First, let me tell you who is selling.

The OGs. They are selling

They have more BTC than all the ETFs put together… 10x more.

And they sell into every bull market.

This pattern is as old as the genesis block.

Chart below: the age x amount of coins being sold. pic.twitter.com/6kUHKJ1cUh

- Willy Woo (@woonomic) June 14, 2024

While the BTC spot market supply is decreasing over time, the charts used by Wu, show , that the supply of paper BTC is increasing. In bear market conditions in 2022, paper BTC dominated despite the lack of spot orders, while this trend has continued so far, contributing to the continued bearish behavior amid the bullish outlook.

Summarizing his findings, Wu said that while there is a sell-off among long-term early holders' Bitcoin holdings, it is exacerbated by the widespread adoption of paper BTC within the market, which diverts demand and affects price movement in a way that differs from traditional dynamics. , related to the offering of the flagship cryptocurrency.