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Did a $5B Bitcoin whale sale spark the post-ETF BTC price crash?

Did a $5B Bitcoin whale sale spark the post-ETF BTC price crash?

CointelegraphCointelegraph2024/01/18 11:59
By:William Suberg

Bitcoin ( BTC ) could have dropped $9,000 last week because of a single whale, a new theory suggests.

In a post on X (formerly Twitter) on Jan. 18, James Van Straten, research and data analyst at crypto insights firm CryptoSlate, drew attention to a “massive” entity selling BTC.

 

1 Bitcoin whale, $100 million profit?

Bitcoin’s 15% dive from $49,000 highs which began on Jan. 11 is widely attributed to a “sell the news” event as part of the United States approval of spot exchange-traded funds (ETFs).

For Van Straten, however, there is a new contender on the radar.

Analyzing the realized price of the BTC supply — the price at which coins last moved — a conspicuous decrease at the highs stands out.

His research implicated an unknown entity in the proceedings. This investor purchased a giant hoard of 100,000 BTC during Bitcoin’s run to all-time highs in 2021, worth $4.8 billion at the time.

Last week, having held the position through the subsequent BTC price drawdown, the whale finally broke even — and the chance to sell at $49,000 was too good to pass up.

“This is why (in my opinion) on Jan. 12, Bitcoin had its largest 1-day drawdown since the FTX collapse and tanked after the ETF started trading,” Van Straten wrote alongside data from on-chain analytics firm Glassnode.

Even with just $1,000 between the entry and exit, the size of the whale’s BTC stack would have netted them a cool $100 million profit — still a worthy prize despite enduring Bitcoin’s longest-ever bear 5f1d76f3-971c-4c23-92f7-07fbd1689f48.

“I assumed they would have held due to holding a 75% unrealized loss,” Van Straten continued.

“Then that sent the market into a frenzy, combined with liquidations, ‘sell the news,’ and record loss-taking.”
Did a $5B Bitcoin whale sale spark the post-ETF BTC price crash? image 0
Bitcoin entity-adjusted realized price distribution chart. Source: James Van Straten/X

Major BTC sales may not be over

As Cointelegraph reported , the post-ETF comedown soon sparked mass liquidations among traders, risking a vicious circle of losses from which BTC/USD has yet to significantly recover.

 

The impact of institutional access to Bitcoin has still to make its presence felt on the markets in terms of constricting supply and associated price increases.

Such was the size of the possible whale sell-off, meanwhile, that it vied with ETF activity itself, including rotation out the Grayscale Bitcoin Trust (GBTC) .

“For context, $GBTC has only sold 27k Bitcoin with similar demand for inflows into the ETFs. That's not enough IMO. I don't think FTX has liquidated its gbtc position yet, either,” Van Straten concluded, hinting at possible further sell-side pressure to come.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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