Bitcoin (BTC) has dropped 13% below its all-time high of approximately $108,000, marking the steepest correction since November, when Donald Trump won the U.S. presidential election. The largest cryptocurrency is trading at around $92,808.07 as of 6:57 a.m. ET on Friday, down nearly 9% from the previous day, according to Coin Metrics.

Long-Term Holders Selling as Short-Term Demand Falters

The recent price decline has been driven by long-term holders (LTHs), who have increasingly sold their holdings into price strength. Data from blockchain analytics firm Glassnode reveals that LTHs reduced their total holdings to 13.2 million BTC from 14.2 million in mid-September. On Thursday alone, LTHs offloaded nearly 70,000 BTC, marking the fourth-largest single-day sell-off of the year.

Short-term holders (STHs), who typically accumulate during market dips, have picked up approximately 1.3 million BTC in the same period. However, demand from STHs has been insufficient to counterbalance the heavy selling pressure from LTHs, contributing to the price slump.

The Federal Reserve’s recent indications of fewer interest rate cuts in 2024 have weighed heavily on risk assets, including cryptocurrencies. Equity markets also faced significant losses, with the bearish sentiment spilling over into crypto.

Bitcoin’s derivatives market reflected the weakening demand. The annualized premium on CME’s one-month futures fell below 10%, signaling a decline in appetite for short-term bets.

ETF Outflows Signal Waning Institutional Interest

The U.S.-listed spot bitcoin ETFs experienced record outflows on Thursday, with investors withdrawing a net $671.9 million. This broke a 15-day streak of inflows and marked the largest single-day outflow since the inception of these funds. Fidelity’s FBTC and Grayscale’s GBTC led the outflows, losing $208.5 million and $188.6 million, respectively.

Ethereum and Broader Crypto Market Trends

The bearish trend has extended to other cryptocurrencies, with Ether (ETH) experiencing its first net outflow of $60.5 million since November 21. Ether’s price has fallen 20% since the Federal Reserve’s announcement, trading below $4,100.

The ongoing market dynamics underscore the importance of monitoring holder behavior, exchange balances, and derivatives data for insights into potential price movements in the coming days.