Bitcoin's recent sharp decline is a result of an ancient whale's movements that triggered liquidations worth $400 million, negatively affecting the entire crypto market.
Reasons for Bitcoin's Decline
Today, Bitcoin surged towards $123,000 but quickly reversed course after a wallet linked to the early days of Bitcoin moved a significant amount of BTC. According to on-chain tracker Lookonchain, the wallet transferred 9,000 BTC (worth over $1 billion) to Galaxy Digital, followed by another transfer of 7,843 BTC. This sudden activity sparked fears of a broader dump.
Impact on the Cryptocurrency Market
The whale's actions led to a cascade of liquidations. According to CoinGlass, more than $400 million in long positions were wiped out within just four hours, triggering market-wide panic. Many large players flipped their positions from long to short, reflecting a defensive mood in the entire cryptocurrency market. Bitcoin's plunge also had a ripple effect on altcoins: Ethereum dropped by 1.4%, while XRP and Solana fell nearly 2% each.
Analysts' Opinions on the Current Situation
Analysts believe this sell-off may indicate a local top, especially as Bitcoin failed to sustain above key resistance levels. "The timing couldn’t be worse. Traders were already booking profits, and this whale just blew the lid off," noted one analyst. If the distribution continues, the market may test lower levels like $112,000 or even $108,000.
In summary, Bitcoin's sharp drop today is primarily due to whale activity and a cascade of liquidations. In the coming days, attention should be paid to whether more BTC will enter the market, which could significantly influence future price movements.
