The world’s foremost cryptocurrency, Bitcoin, recently saw its price drop under the $90,000 mark, causing a ripple of investor anxiety.
IntoTheBlock’s data reveal that the dip has resulted in 12% of Bitcoin addresses now registering unrealized losses—an all-time high since October 2024. The market’s volatile character has made both short- and long-term holders a lot more judicious, with appearances of key support levels now being threatened.
A Whale Awakens: Massive Deposit Raises Questions
Bitcoin’s steady fluctuations morphed into something more enticing when a whale—one of the relatively few big holders of Bitcoin—swam into view. This particular whale hadn’t been heard from for the last three years. Then, out of the blue, it surfaced with a plop and deposited 200 BTC—worth roughly $18.4 million—into the Binance exchange.
That same whale withdrew 300 BTC back in March and June of 2022 at an average price of $30,873. With Bitcoin trading today at $92,263, the whale still holds 98.2 BTC, which today is worth about $9.06 million. Actually, not “today,” because this is an article, and it was written at some point in time. The whale’s profit on that Bitcoin, assuming the whale doesn’t trade or sell, has swollen to around $18.2 million since the last withdrawal, reflecting an impressive gain of 198%.
The whale’s activity took place in a time of volatility. In light of this, we should probably ask whether it is a working-stiff whale or a market-moving whale and whether it is operating on a signal in the direction of price rise or price drop. The profits in play are substantial; my working-stiff whale, if that is what it is, has by now likely profited some substantial fraction of $1 billion, given Bitcoin’s current price. But the price drop in the last 24 hours, by almost 4.5 percent, also has me wondering whether it is time to exit while prices are still high.
Market Conditions and Bitcoin’s Price Struggles
Bitcoin’s price has fallen below the $90,000 level, and it appears to be part of a current trend of uncertainty in the market. The Short-Term Holder Cost Basis, which tells us the average price at which short-term holders have acquired their BTC, is now up to $92,835. This is a very important threshold for Bitcoin right now, because if it can’t hold above the $92,835 level, then the next discussion point for serious traders will be the next major support zone, which is estimated to be around $71,970.
Investors are left with uncertainty when they assess the current market. Is it just a temporary correction or a bearish trend with more to come? Of course, we’re not the only ones in this situation, and several factors influence market sentiment. One is whale activity. Then there’s the good old macroeconomic situation. Finally, there’s the overall confidence in Bitcoin itself. In short, what’s happening is causing a stir, and a lot of people (not just us) are trying to figure it out.
ETF Outflows and Investor Sentiment
The larger Bitcoin market has been affected by the persistent outflows from Bitcoin Spot ETFs, which are meant to track and not predict the price of Bitcoin. With approximately a little less than a full week of negative movement in outflow with these Spot ETFs, we have lost a decent chunk of change with these two Bitcoin-backed ETFs that have taken the majority of the negative outflow and are now up to a combined negative outflow of around $400 million: IBIT with a $158 million negative outflow, and FBTC with a $246 million negative outflow.
The outflows appear to stem from a loss of confidence, especially among large institutional investors. Spot ETFs, which are traded directly against the underlying asset, are often seen as a good representation of the kind of demand that large institutions have for Bitcoin. Outflows from these funds suggest that, at least for now, large institutions have pulled back from Bitcoin. The reason behind this pullback seems to be the rising uncertainty not only with Bitcoin’s own price movements but also with a whole host of risk assets given current conditions like inflation and interest rates.
With Bitcoin’s price hovering near the vital $90,000 line, the activity of whales, the title holders’ increasing unrealized losses, and ETF outflows make it look as if the market is in trouble. The combinations of these phenomena suggest that not only are the holders of Bitcoin not keeping the price propped up, but also that the market itself is perhaps not being seen by too many as a healthy one.
The Road Ahead: Is a Smart Exit on the Horizon?
For many investors, the pressing question is whether the present circumstances foretell a “smart exit” for those sitting in the green, especially short-term holders who might be reeling from the recent price plummet. The recent giant deposit into Binance and the ongoing ETF outflows might indicate growing caution among institutional and large retail investors. While Bitcoin’s long-term trajectory might be set for takeoff, a bumpy near-term might entice some holders into making strategic moves that look more like profit-securing exits than cashing out due to panic.
Bitcoin’s price keeps wavering. This means that the impending days and weeks are of great importance for the market. The question haunting holders and would-be holders is this: Is the price leading us toward a breakout in which we would surpass current resistance and head upward? Or is it leading us toward some kind of breakdown in which it threatens to come back downward and, like a space rocket that has lost its way, return to the ground?
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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Image Source: alekskhmelev/123RF // Image Effects by Colorcinch
