Bitcoin saw a solid rise in selling pressure in Q1 2018. BTC price tumbled, moved below $10,000, and tested the $6,500 support. There were many factors which contributed to an increase in selling pressure on bitcoin.
Bitcoin Sell Pressure Due to Capital Gains
Many investors made nasty gains in 2017 as there was a solid rise in the cryptocurrency market. Prices soared substantially and many people made handsome money.
According to Tom Lee, the head of research at Fundstrat Global Advisors, there is around $25 billion in capital-gains liability.
To pay $25 billion in capital-gains, many investors sold their holdings in bitcoin, resulting in an increase in selling pressure.
The above mentioned figure of $25 billion represents roughly 20% of capital-gains tax receipts to the U.S.
Mt. Gox Sold Holdings
According to an official report by Mt.
Gox, the trust sold a lot of holdings in bitcoin and bitcoin cash. The company stated that they took the permission of the court and sold 35,841.00701BTC and 35,841.00701BTC.
The total value in the Japanese Yen equals 42,988,044,343.
This is a huge sum and resulted in a sharp increase in selling pressure on bitcoin. More importantly, the amount of BTC managed by the bankruptcy estate as of March 5, 2018, is 166,344.35827254 BTC, as per the report.
Fortress Selling Bitcoins
A popular firm, Fortress, reportedly sold around $200 million worth of its bitcoin holdings. It seems like SoftBank’s purchase of Fortress in late December was the main reason of the sell.
Bitcoin and Crypto Ban by RBI
One of the recent factors that increase selling pressure was bitcoin and crypto ban by the RBI in India.
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It resulted in heavy selling pressure in the Indian market and many investors squared off their positions in bitcoin and Ethereum.
The central bank of Indian (RBI) gave three months to the regulated entities like banks and payment gateways to unwind all their positions with the business entities related to cryptocurrencies like bitcoin.
Bitcoin Decline in 2018
Thus, bitcoin sell amount of $25 billion, JPY 42,988,044,343 and $200 million caught the market attention and prices declined heavily.
BTC/USD was down by more than 50 percent from 2017 highs.
At the moment, the price is stable above a crucial support at $6,500. However, a daily close above the $7,500 level is needed for a substantial recovery in the near term.
Most cryptocurrencies declined in March 2018, including ripple, litecoin, EOS, Ethereum, VeChain, Neo, BCC, OMG and others. The market is recovering in April 2018, but it need to gather pace to move back in a positive zone.
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