The recent plunge in price for bitcoin, which took the cryptocurrency below $8000 for the first time in weeks, is being tied to the actions of a whale seller.
The sudden price fall for bitcoin came at a time when the currency appeared to be building strength towards a bull trend. While the price of btc corrected last week after briefly rising above $9000, the coin was trading comfortably above $8k. However, yesterday’s sudden selloff sent bitcoin’s valuation plummeting, shedding nearly $1000 in the span of minutes.
Bitcoin Whale Alert
As opposed to a change of heart for investors or new development, bitcoin’s shifting price was likely due to the pressure of one or a small group of large-capital sellers, referred to as ‘whales.’
According to Whale Alert, a twitter bot that tracks massive crypto buys and sells, over 25,000 btc valued at $215 million was transferred from an unknown wallet to Coinbase’s exchange on June 3.
Following the transfer, 14,000 btc was moved to a wallet at a valuation of $112 million, with another 11,000 btc ($88 million) being sent to a separate wallet. Judging by how quickly the transactions took place, and their change in valuation, it’s clear that the original whale was able to sell the initial 25k btc for $215 million, causing the price of bitcoin to tank.
Following the sudden price correction, the whale then repurchased their 25,000 btc at the new price of $200 million, pocketing $15 million in profit without losing a single btc. And all in the span of minutes.
Regulation Needed to Stop Market Manipulation
Investors and market traders have long been fearful of the manipulation imposed by whales in cryptocurrency. Given the disproportionate amount of btc in certain wallets, with the vast majority of bitcoin concentrated to a fraction of the userbase, whales have been able to exert their will on the market periodically. In addition, the lack of strict regulation and oversight by governing bodies such as the US Securities & Exchange Commission has allowed market manipulators to go unscathed–meaning more whale pump and dumps are likely ahead.
Billy Bambrough, a contributor to Forbes, explained how bitcoin is beholden to large volume trades,
Bitcoin, despite being the most widely traded cryptocurrency with trading volume into the billions of dollars every day, still struggles with wild price swings due to large holders moving significant volumes of bitcoin.
The plunging price of bitcoin eradicated the gains of other top cryptos. XRP, Litecoin and EOS were hit in the massive selloff, with eleventh-ranked TRON also experience significant losses.
Despite TRON Founder Justin Sun announcing his winning bid to have lunch with legendary investor Warren Buffett, the price of TRX fell more than 10 percent, retracing most of its gains since the end of May.
However, as predicted by crypto trader Josh Olszewicz, bitcoin was in need of a correction that may have warranted more than the $500 price correction from $9000. Yesterday’s massive dip may end up being the catalyst needed for bitcoin’s market to take off another bullish trend.