Whales sell and Bitcoin’s price drops, will we see a crash after all?

Just as stock markets have begun making a slight recovery this week, Bitcoin is back to where it was last week, just after President Donald Trump announced he would impose import tariffs on China. This issue has since been resolved between China and the United States, so you would expect Bitcoin to trade at $120,000 again. But it’s not. It’s dropping.

Furthermore, according to data from Blockhead Research Network, whales (crypto wallets holding between 1,000 and 10,000 Bitcoins) appear to be exiting the market. They have sold some 17,500 Bitcoins in recent days.

At the time of writing, Bitcoin is trading at $105,000.

Careful

This strategy demonstrates a degree of caution in light of the current uncertainty. It’s also important to note that since the beginning of the year, whales have been net buyers, accumulating over 318,000 Bitcoins. Only in recent weeks has that trend reversed.

Demand for put options (which allow you to bet on a price decline) has also increased significantly. The volume of these options exceeded $1.15 billion, representing 28% of trade flows. This further indicates that traders are hedging against a potential further decline in Bitcoin.

Finally, implied volatility, a measure of market expectations, also rose above 60%, indicating increased investor nervousness.

In other words, Bitcoin is struggling to maintain its support line at $110,000, and we’re seeing large investors adjust their positions to weather this period of heightened uncertainty. Therefore, caution is the word of the day.