Bitcoin decreased by 1.39 percent in the last 24 hours, increasing its total loss to over 30 percent in a month. While general bear market conditions stand out as the main reason for this weakness observed in the cryptocurrency market, it is considered that the movements of large investors, specifically on-chain data, may increase the selling pressure.
Short-Term Volatility: Bitcoin Whale’s Stock Market Movements
Blockchain analysis company Lookonchain stated that Bitcoin transfers of a large investor with the address 3NVeXm in on-chain data attracted attention. Data provided by Arkham showed that this whale started depositing small amounts of Bitcoin to the Binance exchange three weeks ago. However, it was observed that these movements accelerated last week.
On February 11, the address owner transferred 5,000 Bitcoins to Binance. In the following days, a total of 2,800 more Bitcoins were sent to the exchange through the wallet. Currently, 166.5 Bitcoins are still held in the wallet and it is stated that the current market value of this amount is over 11 million dollars.
Lookonchain stated that the timing of these transfers coincided with the price drops. “The price declines with each deposit. I warned you yesterday, then Bitcoin declined by more than 3 percent,” drawing attention to the impact of the movements on the price.
Selling Pressure and Fragility in the Market
Transferring large amounts of Bitcoin to exchanges is interpreted by most market participants as transactions aimed at selling or hedging positions. Transfers are thought to increase short-term selling pressure, especially within the fragile market structure. In the face of such sudden movements, other investors also adjust their positions by closely monitoring on-chain signals.
During this period when sales in the market were intense, an analyst stated that Bitcoin’s losses reached 2.3 billion dollars. This loss was recorded as one of the 3-5 largest loss events in the history of cryptocurrency.
The analysis included the evaluation that “The majority of short-term investors collected their assets from the market in the range of 80-110 thousand dollars and are now leaving with large losses. This indicates that small investors who made risky transactions have withdrawn from their positions.”
On the other hand, it is stated that long-term investors are not the main source of new sales, and those in this group have historically tended to maintain their positions in price declines.
The analyst said, “In the past, sharp recoveries have been observed during similar high loss periods. This time, Bitcoin jumped from 60 thousand dollars to 71 thousand dollars. However, this movement may also be the beginning of a deeper decline. Relieving rises can often be experienced in prolonged bear markets.”
Some market evaluations state that Bitcoin may still be in the early stages of the general bear market and the downside risk continues. CryptoQuant analysts show the realized price of Bitcoin at 55 thousand dollars. In previous cycles, the price fell 24-30 percent below this level and then followed a horizontal course; Currently, it appears that Bitcoin is still above this level.
When Bitcoin approaches these critical levels, it generally enters a horizontal course and then a recovery period. In some comments, it is evaluated that a correction below 40 thousand dollars may lead to the formation of a more significant bottom.
