Single Bitcoin Whale Potentially Triggered $9,000 BTC Drop: CryptoSlate Analyst
Summary:
A theory proposed by CryptoSlate's James Van Straten suggests that Bitcoin's $9,000 fall last week could be attributed to a lone Bitcoin whale who sold a large quantity of Bitcoin. Van Straten suggests that this unidentified investor, who had amassed 100,000 BTC during Bitcoin's previous high in 2021, cashed in when Bitcoin hit $49,000 last week. Despite Bitcoin's longest-ever bear market, the whale could have potentially made a $100 million profit. The report also hints at more considerable Bitcoin sales in the future.
A recent conjecture suggests that Bitcoin's $9,000 drop last week may have been due to a lone Bitcoin whale. In a Jan. 18 X post (formerly known as Twitter), CryptoSlate's research and data analyst, James Van Straten, brought to limelight a considerable entity offloading its BTC shares.
Did a single Bitcoin whale rack up a profit of $100 million?
Many believe that the 15% dip in Bitcoin from its zenith of $49,000, which began on Jan. 11, can be attributed to an investor reaction to the United States' approval of spot exchange-traded funds (ETFs).
Nevertheless, Van Straten has identified another potential contributor to the dip. He examined the realized price of the BTC supply, that is the price at which the coins were last transferred, and found a prominent decline at its highs. His investigation placed the spotlight on an unidentified investor who had assembled a colossal amount of 100,000 BTC during Bitcoin's climb to its record peak in 2021, amounting to $4.8 billion back then.
Last week, after maintaining their position throughout the subsequent Bitcoin price deflation, the whale used the opportunity to sell at $49,000.“On Jan. 12, we saw Bitcoin's largest one-day drop since the FTX crash due to this and the impact of the ETF commencement,” Van Straten observed based on Glassnode's on-chain analytics data. The whale could have made a massive $100 million profit given the slight $1,000 gap between the purchase and selling prices, a significant return despite the historically drawn-out bearish trend of Bitcoin.
Van Straten added, “I had anticipated the whale to hold considering a 75% unrealized loss. This set the market into a frenzy, with panicked selling, liquidations, and record-taking of losses following suit.”
More considerable BTC sales might still be expected. The aftermath of the ETF approvals saw mass liquidations by traders risking a spiral of losses from which Bitcoin prices are yet to substantially bounce back from.
The influence of institutions gaining access to Bitcoin hasn't yet registered in the market in terms of supply restriction and corresponding price hikes. The magnitude of the suspected whale sell-off was such that it competed with ETF activities, including rotation from the Grayscale Bitcoin Trust (GBTC).
Van Straten commented saying, “For perspective, only 27k Bitcoin have been sold by $GBTC, which isn't significant enough in my opinion. I also don't believe FTX has liquidated its GBTC position yet." This could indicate more sell-side pressures ahead.
This news piece doesn't offer investment advice. Investing and trading do come with risks and should only be attempted after thorough research.
Published At
1/18/2024 2:54:03 PM
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