• Analyst Willy Woo attributes Bitcoin’s recent bearish momentum to selling pressure from long-term holders (LTHs), as evidenced by spikes in the Coin Days Destroyed (CDD) metric.
• The prevalence of “paper Bitcoin”—derivative products that don’t require owning actual BTC—is also contributing to the downturn.

Bitcoin has been struggling despite the influx of spot exchange-traded fund (ETF) purchases. Analyst Willy Woo recently explained why BTC has been experiencing bearish momentum in a new thread on X. Woo attributes the downturn to selling pressure from long-term holders (LTHs), who are typically known for holding onto their coins for extended periods, per the Crypto News Flash report.

The Coin Days Destroyed (CDD) metric, which tracks the movement of coins and weighs it against the coins’ age, supports this theory. A spike in CDD indicates that a significant number of previously dormant coins have been moved.

Earlier this year, a substantial increase in Bitcoin’s CDD coincided with the cryptocurrency reaching a new all-time high, suggesting that long-term holders participated in considerable selling during this period.

The chart also shows that similar spikes in the indicator occurred during the mid-2017 and 2021 bull runs. Therefore, this latest selloff from long-term holders (LTHs) aligns with historical patterns.

Another factor that may be contributing to the recent slowdown is the prevalence of “paper Bitcoin.” “Paper BTC” refers to derivative products that don’t require investors to own actual tokens of the cryptocurrency. The analyst added:

“In the old days, BTC would go on an exponential run because the only sellers was a trickle from the OGs and an even smaller amount from miners with their newly mined coins. Today the magic of paper BTC is what you want to watch”.

A Look Into Bitcoin Exchange Inventory

The chart indicates that the spot inventory of the asset has either declined or remained stagnant over the past few years, signifying no significant net deposits to exchanges.

However, the combined inventory of spot and paper BTC rose during the 2022 bear market. This suggests that while spot inventory remained stable, paper BTC was being rapidly minted, with the analyst noting that paper BTC likely influenced the bear market.

The graph also highlights instances during the current bull market where increases in paper BTC have coincided with slowed rallies. Recently, the inventory of paper BTC has been rising again, which could be a factor in Bitcoin’s struggle to maintain bullish momentum.

BTC Price Action

The Bitcoin price has been facing significant selling pressure amid the recent selling from the Bitcoin miners after the Bitcoin halving event. In the last 24 hours, the BTC price has tanked further by 1.23% falling under $65,000.