Bitcoin Price Drops as Whale Activity and Derivatives Market Turn Negative

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TLDR

Bitcoin saw a significant decline from its early-year peak of $97,900, falling to around $89,500.
Derivatives data shows sustained selling pressure, with Net Taker Volume remaining negative since mid-January.
On January 20, Net Taker Volume registered a sharp decline of -$319 million, signaling continued bearish sentiment.
Whale wallets transferred over $400 million worth of Bitcoin to spot exchanges on January 20, indicating increased selling activity.
The pressure on Bitcoin is also attributed to trade tensions and geopolitical factors, which have further weakened market sentiment.

Bitcoin (BTC) has seen a shift in momentum since its strong start to the year. After climbing to $97,900 on January 14, it has dropped 8.5%, falling to around $89,500. The recent decline reflects growing selling pressure, with both external factors and market data indicating an increasingly bearish outlook.

Bitcoin Faces Pressure from Derivatives Market

Bitcoin’s recent drop has been amplified by rising selling pressure in the derivatives market. According to market data, Net Taker Volume has remained negative since mid-January, confirming that sellers have stayed dominant. On January 20, Net Taker Volume registered a sharp decline of -$319 million, the second such drop in recent weeks.

Taha emphasized that a negative Net Taker Volume typically suggests that sellers are in control, increasing the downside risk for Bitcoin. The first instance of this decline occurred on January 16, when Bitcoin’s price slipped from $95,000 to $90,000. This pattern highlights the value of Net Taker Volume as an early indicator of continued bearish momentum.

Whale Activity Signals Increased Selling Pressure

In addition to derivative markets, whale activity has contributed to Bitcoin’s recent downfall. On January 20, whale wallets transferred over $400 million worth of Bitcoin to spot exchanges, further adding to selling pressure. This move followed a similar deposit of $500 million worth of Bitcoin on January 15, just before a significant price drop.

CryptoQuant’s Whale Screener tracks deposits and withdrawals from large Bitcoin holders. According to analyst Amr Taha, such large transfers to spot exchanges often indicate an intent to sell or a boost in available supply that can drag down prices. The surge in whale activity points to growing urgency among large holders to liquidate their positions.

While Bitcoin’s price decline has been partially influenced by external macro factors, market dynamics also show the increasing dominance of sellers. Trade tensions stemming from President Trump’s recent tariff threats have weighed on investor sentiment, further pressuring the cryptocurrency.