TLDR
- Bitcoin whales have been offloading their holdings, leading to a significant drop in Bitcoin’s price below $100,000.
- Long-term Bitcoin holders have sold around 400,000 BTC, worth approximately $45 billion, creating market instability.
- Whale behavior has been linked directly to Bitcoin’s price movements, with large sell-offs driving downward momentum.
- Institutional investments like Strategy and Bitcoin ETFs delayed the bear market but could not prevent the recent downturn.
- Analysts predict that the market slowdown could continue, with Bitcoin potentially reaching a maximum downside of $85,000.
Bitcoin whales have been cashing out their holdings, triggering a downward price trend for the cryptocurrency. The recent sell-offs have caused Bitcoin (BTC) to drop below $100,000 for the first time in five months. This marks a sharp decline of over 20% from its peak in October, stalling efforts by bulls to push Bitcoin back to $110,000.
Bitcoin Whales Cashing Out Since $100,000 Milestone
CryptoQuant CEO Ki Young Ju points out that Bitcoin whales have been selling since the coin first surpassed $100,000 in December. He argued that while institutional purchases delayed a bear market, they could not prevent it forever.
“Inflows from Strategy and Bitcoin ETFs postponed the bear market. If those fade, sellers will dominate again,” Ju explained.
Research from Santiment supports Ju’s theory, suggesting that whale behavior directly affects Bitcoin’s price movements. When whales accumulate, prices stabilize, providing a foundation for potential gains. However, when whales start selling, it can erode that base, triggering downward momentum.
Long-term Bitcoin holders have offloaded roughly 400,000 BTC in the past month, totaling approximately $45 billion. Markus Thielen of 10x Research notes that this outflow has left the market unbalanced.
“The sell-off by long-term holders signals a shift in market dynamics,” Thielen said.
This market shift has contributed to Bitcoin’s dip below $100,000, marking a 20% drop from its all-time high in early October. Thielen predicts the market slowdown could persist into next year. He also suggests that Bitcoin may face a maximum downside of $85,000.
Recent data from CryptoQuant reveals that coins held for one to six months account for nearly 71% of recent exchange inflows. Whales who purchased Bitcoin between $60,000 and $85,000 during the summer are now realizing substantial profits, according to Crazzyblock. This selling pressure from recent buyers contrasts with long-term holders who have contributed little to the recent market dip.
Despite the sell-offs, institutional transactions continue to dominate the market. Professional traders handling between 10 and 100 BTC made up 53.1% of all market flows. Retail investors, on the other hand, accounted for only 36.8%, highlighting the ongoing role of institutional players in market movements.
Whales Diversifying into ETFs and New Blockchain Projects
According to Dr. Martin Hiesboeck, head of research at Uphold, many long-time Bitcoin holders are now moving into Bitcoin ETFs.
Hiesboeck pointed out that “BTC whales are beginning to sell their coins as they transition into exchange-traded funds.”
He added that these investors are diversifying as blockchain technology expands across various industries.
This shift in investment behavior aligns with Hiesboeck’s observation that Bitcoin’s compound annual growth rate has decreased by about 13%. Bitcoin whales’ increasing diversification could reflect broader changes in the digital asset landscape, shifting focus from Bitcoin alone.
Bitcoin’s recent correction represents the third pullback in its current market cycle. Despite the dip, analysts believe that Bitcoin’s long-term uptrend remains intact. Bitcoin’s relative strength index (RSI) sits on a multi-year base, while its MACD has flattened, suggesting potential for future rallies.
Some analysts point to previous market cycles, where similar setups triggered price rallies of 80% to 180% in subsequent months. Despite the current downturn, many expect Bitcoin to recover as its price remains supported by its historical trend of resilience.
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