Renowned on-chain analyst Willy Woo is dissecting the factors behind the current Bitcoin (BTC) downturn.

Woo is informing his 1.1 million followers on X that Bitcoin OGs, referring to early, long-term BTC holders, are actively selling off their holdings.

Using a chart as evidence, the analyst reveals that BTC’s coin days destroyed metric is increasing significantly, indicating that long-inactive coins are being transferred, potentially to cryptocurrency exchanges for sale on the open market.

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

While long-term holders are divesting some of their Bitcoin, Woo highlights that the selling pressure is being intensified by futures markets, which he refers to as paper BTC.

“Paper BTC has inundated the market since 2017. Futures markets. In the past, if you wanted to buy BTC, you had to purchase real BTC. Now, you can acquire paper BTC. Therefore, a non-investor can sell you that paper. Together, you create a synthetic BTC. The demand for BTC is redirected to paper BTC, met by counter traders who lack BTC to sell, only having USD to back their speculation. Keep an eye on the magic of paper BTC.”

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

“The bear market of 2022 was influenced by an influx of paper BTC when spot holders were not actively selling. In the current bull market, I have highlighted instances when paper increased, coinciding with stagnant price movements. We are currently experiencing one of these phases.”

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

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