Did the $5B Bitcoin Well Sale Trigger a Post-ETF BTC Price Crash?
Bitcoin (BTC) could have dropped $9,000 last week due to a whale, a new theory suggests.
In a post on X (formerly Twitter) on January 18th, James Van Straten, research and data analyst at crypto insights firm CryptoSlate, focused on the BTC trading giant.
One Bitcoin Well, $100 Million Profit?
Bitcoin's 15% plunge from a high of 49,000 that began on January 11 was attributed to a “selling on the news” phenomenon, part of the approval of US exchange-traded funds (ETFs).
But for Van Straten, there is a new contender on the radar.
Analyzing the supply price of BTC – the price at which the coins last moved – a significant decrease in the high level is highlighted.
His research involved an unknown entity in the process. In the year He bought a massive stockpile of 100,000 BTC in 2021 during Bitcoin's peak, worth $4.8 billion at the time.
Last week, holding the position through the next BTC price decline, the whale finally broke – and the opportunity to sell at $49,000 was very good.
“That's why (in my opinion) on January 12, Bitcoin had a 1-day uptrend since the fall of FTX and tanked after the start of ETF trading,” Van Straten wrote with data from chain analysis firm Glassnode.
Despite only having $1,000 between entry and exit, the whale's BTC stack size would have netted them a cool $100 million profit — a worthy prize even if they continue Bitcoin's long-term bear market.
“I thought 75% would be caught because of an undisclosed loss,” Van Straten continued.
“Then that sent the market into a frenzy, combined with liquidation to ‘sell the news' and record losses.”
The major BTC sales may not be over.
As Cointelegraph reports, the post-ETF drop soon triggered mass outflows among traders, risking a vicious circle of losses BTC/US has yet to recover significantly.
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The impact of institutional access to Bitcoin should be ensured in the markets in terms of tightening supply and associated price increases.
Meanwhile, the size of the whale sell-off, meanwhile, shows it has been on fire with ETF activity, including a rollover from the grayscale Bitcoin Trust (GBTC).
“For context, $GBTC has only sold 27k Bitcoin with interest going into ETFs. That's not enough IMO. I don't think FTX has eliminated the gbtc position yet,” Van Straten concluded, hinting at potential sell-side pressure ahead.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
