Bitcoin Whales’ Potential Impact on Price Movements
On September 2nd, Bitcoin [BTC] saw a rebound of more than 3% in a single trading session. Reports surfaced suggesting that large investors, known as whales, were accumulating BTC, fueling excitement in the market.
Despite this initial surge, the cryptocurrency struggled to maintain its upward momentum, casting doubt on the validity of these reports.
According to findings from Lookonchain, whales have been transferring Bitcoin to exchanges, even amid overall healthy outflows. This behavior hints at a deliberate effort by whales to introduce greater volatility into the market.
Further analysis by CryptoCrypto revealed negative netflows from Bitcoin ETFs, contributing to a lack of confidence among investors.
Given these developments, a closer examination of Bitcoin addresses was necessary to understand the extent of accumulation.
Data from IntoTheBlock showed a decrease in the number of addresses holding different amounts of BTC between August 25th and September 2nd.
- Addresses with holdings between $100,000 to $1 million declined from over 516,000 to more than 486,500.
- Addresses owning $1 million to $10 million worth of BTC reduced from 100,540 to 96,150.
- Large addresses with over $10 million worth of Bitcoin dropped from 100,440 to 100,000.
Potential Price Manipulation Tactics?
The data suggests that a substantial number of whales contributed to the selling pressure on Bitcoin. The initial excitement around their accumulation may have been a strategic move to induce market hype and provide liquidity for their exit positions.
Consequently, the lack of sustainable growth beyond $60,000 for Bitcoin could be attributed to these sell-offs.
Inducement scenarios typically involve a surge in leveraged positions. The data reflects a significant increase in net long positions, peaking at 52.82 million near the $58,000 price level.
These higher long positions indicate a heightened expectation of further gains and renewed interest in leveraging trading.
Notably, the estimated leverage ratio for Bitcoin reached a trough on August 12th, indicating a shift towards increased leverage that may lead to significant liquidations in the event of a market downturn.
As of the latest data, Bitcoin was trading at $58,861, experiencing a slight 0.47% decrease in value over the past 24 hours.
This decrease reflects the ongoing struggle to maintain upward momentum, a trend influenced by the sell pressure exerted by whales. It also raises concerns about potential liquidations if the price continues to drop.
The upcoming 24 hours will be pivotal for Bitcoin, especially with the market eagerly anticipating the Federal Reserve’s decision on interest rates. The outcome of this decision could contribute to heightened volatility in the latter half of the week.