The crypto markets suffered sudden and painful sell-offs on Sunday — throwing Bitcoin’s bullish momentum into fresh doubt.
It all began when a whale sold 24,000 BTC in a batch of transactions just a few hours apart, coins with a market value of more than $2.7 billion.
Bitcoin fell off a cliff as a result — plunging from $115,000 to $111,000.
This dump also proved calamitous for Ether, which had just secured a fresh all-time high for the first time in almost four years.
The world’s second-largest cryptocurrency had accelerated to $4,953.73, but endured selloffs of its own as Bitcoin tanked.
CoinMarketCap data now shows it’s 7.75% off the record price established just hours earlier. Once again, $5,000 now looks like it’s cruelly out of reach.
Thinner trading volumes at the weekend mean large transactions can result in amplified price swings — and there was no shortage of angry reaction on X. Scott Melker, also known as “The Wolf of All Streets,” wrote:
“How mentally incapable do you have to be to market sell 24,000 $BTC in a single clip on a Sunday?”
Nerves were also growing considering that the whale behind this controversial transaction continues to own over 152,000 BTC — a bag worth $17 billion.
Some pretty interesting takes have emerged amongst all the chatter. Some believe this whale may be selling off their BTC and snapping up ETH instead — chasing healthier returns and following in the footsteps of institutional ETF traders.
Others theorized that the whale must have had an urgent reason to perform such a transaction on a Sunday, writing:
“Whoever it is must be aware of something seriously amiss — something so grave that not selling would be a far more detrimental choice.”
Another common concern centers on how a transaction like this can have such a calamitous impact on Bitcoin’s price in the first place.
“Crazy how just 1/1000th of the market cap in volume crushes price by 5%.”
Put another way, it’s incidents like this that painfully illustrate the lack of depth in the crypto markets. One wrote:
“A single entity can swing billions with one button, which says a lot about the current state of liquidity.”
X’s AI tool, Grok, was asked to wargame what would happen if the whale sold the remaining 152,000 BTC in their wallet, all in one go. Given how this initial 24,000 BTC dump led to a 3.5% drop in price, it estimated that a complete exit could see Bitcoin dwindle to a range of between $79,000 and $90,000, putting this digital asset well and truly in bear market territory. Matters could be even worse if panic selling ended up being thrown into the mix.
Of course, it would be unfair to lay the blame solely on this Bitcoin whale, with $271 million of liquidations exacerbating the situation as leveraged traders were wiped out.
It was pretty entertaining to see some on X argue that this is proof that Bitcoin shouldn’t be concentrated in the hands of whales, as this means the fate of the market rests with a small number of rich traders.
That horse has well and truly bolted. Let’s not forget that Strategy now owns 629,376 BTC — almost 3% of Bitcoin’s total supply. Yesterday’s transactions would look like a rounding error if the company ever chose to offload its stash.
Indeed, an article in today’s Financial Times has sounded the alarm about Bitcoin treasury companies more widely. Columnist Patrick Jenkins pointed out that more than 160 of them now exist around the world — all inspired by Michael Saylor, and many of them pivoting away from less successful industries.
Many are taking on extraordinary levels of debt in order to fund additional Bitcoin purchases, and Jenkins warned that this is highly likely to end in tears:
“As long as the bull run continues, Bitcoin treasury companies — not very different from a Ponzi scheme upon a Ponzi scheme — may prosper. But ‘crypto winters,’ as the ‘bros’ discovered in 2018 and 2022, tend to be harsh; come the next one, BTC investors are likely to find the misery is squared, too.”
Food for thought at the start of a brand-new week.
The post Why Bitcoin Whale’s Huge Selloff Spooked Traders appeared first on Cryptonews.
