Bitcoin price is down more than 10% from its new all-time high at over $ 60,000 over the weekend after an overnight sell-off. The now sizeable correction was initially viewed as a massive whale pouring more than $ 1 billion in BTC onto the Gemini crypto trading platform, but it ultimately turned out to be something else. Here’s what actually caused the correction and why the market was so easily shaken by what ultimately wasn’t an event.
Whale Watching: Bitcoin Price Drops More than 10% After $ 1 Billion BTC Transfer
Bitcoin price exceeded the resistance this weekend, causing the leading cryptocurrency by market cap to soar to a new record high of $ 62,000. The breakout pattern appeared to be similar to the surge from the previous range, but due to the lack of momentum that coincides with buying after Tesla BTC, the price move has fallen since then.
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The original cause of the sell-off was warnings that triggered that 18,961 BTC – more than $ 1 billion in Bitcoin at the time – had shifted to the Gemini cryptocurrency exchange. The speculation-driven crypto community began taking profits, hedging positions, and more, expecting a major sell-off caused by a whale this size dropping its coins.
An internal transfer of $1 billion in BTC spooked the market into a selloff | Source: BTCUSD on TradingView.com
The sell-out began from late Sunday evening through to overnight Monday hours. Bitcoin is now down a total of 10% from the weekend’s highs, but when the dust cleared this morning, it turns out that the massive BTC transfer was not made by a whale at all.
Why was the crypto market so easily shaken by fake news?
According to the blockchain analytics firm glassnode, the over $ 1 billion BTC was an internal transfer carried out at the Gemini cryptocurrency exchange. Bitcoin expert Willy Woo says this is the second time that incorrect data has resulted in a sell-off in the market. So why are investors and traders so nervous?
Markets are selling on fake data that says $ 1 billion of BTC is pouring into Gemini.
It’s the second time in 30 days.
Graphic: Leverage positions are liquidated when traders sell. Red dots indicate the time of the wrong inflows. (28,000 or 18,000 BTC) https://t.co/bQ8WvajyEJ pic.twitter.com/FtMPW2Oy03
– Willy Woo (@woonomic) March 15, 2021
Most Bitcoin investors make good profits and understand enough about cryptocurrency to know that those profits can go away in no time at all. The past bull markets culminated in a collapse of $ 17,000, or 84%, in the months that followed, at a price of just $ 20,000 per coin.
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An 84% drop from current prices, or even a 60% drop from Black Thursday standards, would bring the price per coin down to $ 11,000- $ 24,000. And while that may sound extreme, data shows that Bitcoin has done it multiple times in the past and could very well do it again.
That fact alone has investors and traders sitting on big profits ready to jump the gun.
Featured image from Deposit Photos, Charts from TradingView.com