Renowned on-chain analyst Willy Woo is dissecting the factors behind the current Bitcoin drawdown, according to a report.

Woo, who has a following of 1.1 million on the social media platform X, reveals that early Bitcoin holders, known as Bitcoin OGs, are actively selling off their holdings. He presents a chart indicating that BTC’s coin days destroyed metric is increasing rapidly, implying that dormant coins are being transferred, potentially to cryptocurrency exchanges for sale on the open market.

“Let me clarify who is selling – the OGs. They hold more BTC than all the ETFs combined… 10 times more. And they consistently sell during every bull market. This trend dates back to the Genesis block,” Woo explains.

Despite long-term holders reducing their Bitcoin holdings, Woo points out that the selling pressure is being amplified by the futures markets, which he refers to as paper BTC.

“Since 2017, paper BTC has flooded the market through futures markets. Previously, if you wanted to buy BTC, you had to purchase real BTC. Now, you can trade paper BTC. This means that a non-Bitcoin holder can sell you that paper. Together, you create a synthetic BTC. The demand for BTC is diverted to paper BTC, fulfilled by traders who do not actually hold BTC, but use USD to support their trades,” Woo elaborates.

Woo also presents a chart indicating that while the supply of spot market BTC has been decreasing over the long term, the supply of paper BTC seems to be increasing.

“The 2022 bear market was influenced by an influx of paper BTC when spot holders did not sell significantly. In the current bull market, I have identified periods when paper BTC increased, coinciding with price stagnation. We are currently in one of these periods,” Woo notes.

As of the time of writing, Bitcoin is valued at $66,286.

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