Bitcoin price drops to $8,900 due to whales selling on major exchanges?

As the weekly market began, the price of Bitcoin quickly fell back below $9,000, and BitMEX alone liquidated $30 million in longs. According to market data, part of the sell-off was due to crypto whales unwinding positions, leading to panic selling by retail investors.

Whales (individual investors who hold large amounts of Bitcoin) have the ability to have a significant impact on the price of Bitcoin. According to on-chain data provider CryptoQuant, the recent sell-off points to the beginning of a bearish trend in the market.

CryptoQuant CEO Ki Young Ju stated:

“A few days ago, Gemini’s Bitcoin reserves reached their highest level in a year, and then began to decrease. In the short term, this may be a buying opportunity, but from a macro perspective, the reserve trend seems to be declining.”

The negative premium rate of Grayscale Bitcoin Trust has expanded to 42.7%: On November 18th, according to the data on the Tokenview chain, the current total holdings of Grayscale reached 14.645 billion US dollars, and the premium rates of mainstream currency trusts are as follows:

BTC, -42.7%

ETH, -40.12%

ETC, -66.95%

LTC, -42.7%

BCH, -34.78%[2022/11/18 13:19:57]

Gemini Bitcoin Reserves   Source: CryptoQuant

The dark web Joker's Stash will be closed next month, and Bitcoin's annual revenue exceeds $1 billion: The dark web Joker's Stash will be closed next month, according to a report by the dark web security company Gemini Advisory, the site's Bitcoin revenue in the past year Revenue exceeds $1 billion. Joker's Stash is known to be one of the longest-running marketplaces selling stolen credit cards. (Decrypt) [2021/1/18 16:27:58]

The last time bitcoin reserves were suddenly reduced at this key price level was in February 2020, when bitcoin hit $10,500. Over the next six weeks, the price dropped to $3,600.

Voice | Cryptocurrency analyst Willy Woo: Bitcoin is very likely to fall to $2,000: Cryptocurrency analyst Willy Woo analyzed the trend of Bitcoin and said that history does follow a pattern, and we can expect that in the spring (most likely 4 May) bottoming out at $1,700-2,200, the price of Bitcoin will fall even lower before reaching $10,000. [2019/2/17]

Gemini Bitcoin reserves  Source: CryptoQuant

There are three reasons why whales feel the need to take profits at current price levels. One is that in the past 11 months, the bitcoin price has faced rejection at $10,500 twice. Other reasons are that mining difficulty is expected to see its biggest increase since January 2018, and spot transaction volumes are declining.

For whales holding large amounts of Bitcoin, liquidity is key. If there aren't enough buyers in the market, and a large whale starts selling, it can trigger a cascade of sell orders and liquidations.

For whales, when spot market volumes stagnate and futures market activity increases, it raises fears of a rapid short-term decline.

For example, on March 13, the price of Bitcoin dropped 50% overnight, falling below $4,000, as whales began selling at high prices. A massive sell-off ensued, culminating in the liquidation of $1 billion in futures contracts, the largest one-day drop in Bitcoin’s history.

Whales appear to be closing in on profits after Bitcoin surged 130% over the past three months. By doing so, they are able to protect their assets and also hedge against the relatively small trading volume of the cryptocurrency market.

As with previous sell-offs, major investors may also view current geopolitical risks and volatility in global stock markets as external variables that could affect the momentum of the cryptocurrency market.

Bitcoin Exchange Inflows Rise Again as U.S. Stocks Slump Source: CryptoQuant

From a technical standpoint, Bitcoin’s recent moves are straightforward. A loss of $9,000 increases the odds of a drop to the $6,000 to $7,500 support. Historically, $6,000, $6,400, $7,100, and $7,400 have served as strong support levels.

Currently, analysts are pointing to Bitcoin whales at Coinbase and Gemini as catalysts for the recent decline.

CryptoQuant Chief Strategy Officer Mason Jang tweeted:

" Bitcoin exchange inflows are surging again. Since June 15, 02:00 UTC, a total of 15,597  BTC have flowed into exchanges. Coinbase and Gemini whales dumped BTC before the price of BTC fell .”

With the Dow Jones Industrial Average and major stock market indexes across Europe and Asia continuing to fall, a correction in Bitcoin could provoke a strong reaction from investors during such uncertain times.

In the short term, investors will be watching closely to see if Bitcoin can close above the $9,400 to $9,500 region.

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