The past week has indeed been a rollercoaster journey for Bitcoin (BTC), with substantial whale activity sparking a mass withdrawal of BTC from cryptocurrency exchanges, ultimately resulting in a price correction. Once reaching its all-time high (ATH) of $73,836, the price has since declined to as low as $64,909.
Whales Cash In, Exchanges Witness Exodus
Whales have been causing ripples by withdrawing a considerable sum of BTC from exchanges. Crypto analyst Ali Martinez reported a staggering withdrawal of 21,401 BTC this week. This mass exodus peaked on Thursday, March 14th, with a record-breaking single-day withdrawal of $752 million worth of Bitcoin. According to data from Into The Block, this surge in withdrawals marked the highest daily outflow since May 2023.
Market Feels the Pinch: Price Crash and Supply Shock
The mass withdrawal of BTC by whales coincided with a notable correction in the Bitcoin price. On Friday, March 15th, Bitcoin prices plummeted over 7%, dragging the entire cryptocurrency market down with it. This price crash can be attributed, at least partially, to the sudden decrease in available supply on exchanges. With only $1.81 million worth of BTC currently on exchanges, as per Coinglass data, a potential supply shock may be unfolding.
A Silver Lining: New Whales Emerge
While the whale activity raises concerns about a potential supply squeeze, there’s a positive development to consider. The network has witnessed the emergence of 13 new whales, each holding over 1,000 BTC. This signifies growing institutional and investor interest in Bitcoin, potentially laying the groundwork for future growth.
Price Decline Despite Gains: Liquidations and Profitability
Despite enjoying a strong 1-month gain of over 25%, the recent price correction has pushed Bitcoin down to $64,909 as of Sunday, March 17th. This represents a 6.28% drop and a significant plunge of over 13% from its recent all-time high of $73,836. Further fueling the decline is a steep drop in trading volume (down 15.78%) and a massive liquidation of long positions ($125.81 million) over the past 24 hours.
Profitability Slips, Resistance Levels Emerge
Data from IntoTheBlock reveals a concerning trend in profitability for Bitcoin addresses. During the all-time high, 100% of addresses were “in the money,” meaning they held Bitcoin at a profit. However, this number has shrunk significantly, with only 50.1 million addresses (around 96.39%) currently profitable. To restore 100% profitability, the price would need to retest the $68,992.54 to $72,500.92 range. This zone presents a strong resistance level due to a large number of addresses (over 870,000) accumulating BTC at these price points.
Whale Activity and Market Sentiment: A Shift?
The recent decline in whale activity of buying suggests a potential shift in market sentiment. While major players like BlackRock and MicroStrategy were instrumental in accumulating Bitcoin during the rally, large transaction volumes have dropped significantly. This, coupled with the price correction, paints a picture of cautious optimism or even bearish sentiment among some whales.
Correction or Rebound? The Road Ahead for Bitcoin
Analysts believe the current downturn might be a healthy correction for the Bitcoin market, paving the way for a stronger upswing in the near future. The anticipation of a spot Bitcoin ETF approval and the upcoming Bitcoin halving event, which will significantly reduce the mining reward, could provide some much-needed support around the current $65,000 price level. Currect bounce back to $68,282.84 indicates investors, anticipation for new ATH.
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