Short-Term Holder Mistakes Repeat: Bitcoin Falls After Clown Wallets Activity

Since October 9, the price of Bitcoin has fallen by approximately 17%, from $124,000 to $112,000. According to Binance blockchain data, this decline was not random and was not solely due to Donald Trump's tariffs on China. Experts stated that there were clear signs of market overheating associated with the actions of short-term holders (STH), who traditionally exhibit weak position management behavior.

On October 9, a surge in purchases was recorded by the Clown Wallets group—wallets known for acquiring BTC at local peaks. Around 484 BTC were purchased, immediately after the price reached $122,000. Similar activity had preceded sharp declines three times already: in July, August, and September 12. Each time these wallets purchased more than 450 coins, the Bitcoin price fell shortly afterward.

Additional data on the realized market capitalization of short-term holders confirms this pattern. When their combined market capitalization peaks, the market almost always corrects. On January 24, for example, the market reached $13.5 billion, after which the Bitcoin price fell 30%. Then, on July 18, at $29.5 billion, the decline was 10%. Finally, on October 8, STH's market capitalization rose to $22.5 billion, after which the price fell from $124,000 to $112,000.

Similar signals are also being observed in fund flows on the Bitcoin ETF market. Since late September, particularly thanks to the iShares IBIT fund, inflows have returned to positive territory. However, the main source of demand is retail investors, who traditionally enter the market late, adding to the pressure on the price during subsequent corrections.

Analysts noted that monitoring the behavior of short-term holders can serve as one of the most accurate indicators of local market peaks and bottoms. When they begin buying en masse, it often signals the formation of a cycle top and the withdrawal of large capital.

Source: cryptonews.net