The recent dip in Bitcoin price after reaching a new all-time high has left many investors and traders concerned about the potential factors contributing to the crash. On-chain data has revealed an interesting scenario where a dormant Bitcoin whale address, holding a significant amount of BTC, suddenly became active after 14 years of inactivity. This event has shed light on the impact that large holders can have on the market dynamics and the resulting selling pressure that led to the price decline.
According to Spot On Chain, the dormant Bitcoin address holding $67.1 million worth of Bitcoin came to life to sell all of its holdings after remaining inactive for more than a decade. The whale address, which had minted 1,000 BTC back in 2010 when the price was below $0.28, sold its holdings at a price of $67,116 per coin. This move by the dormant whale contributed to the recent market crash, as the sudden influx of selling pressure caused Bitcoin to fall from its new all-time high of $69,200 to $61,200.
The reactivation of old, dormant whale addresses containing massive amounts of BTC is a phenomenon that attracts the interest of investors and traders. While not all dormant addresses indicate profit-taking, the sudden movement of large holders can have a significant impact on the market sentiment and price action. In this case, the reactivation of the dormant whale address led to a wave of profit-taking among investors, further exacerbating the price decline.
Despite the initial price dip, Bitcoin has since regained its footing and is currently trading at $66,915. The recent spike in price can be attributed to massive accumulation from traders and institutional inflows into Spot Bitcoin ETFs. While there have been outflows from Grayscale’s ETF, the total net flow into ETFs has reached $8.895 billion since January 11. Additionally, Bitcoin whale transactions worth at least $100,000 now stand at $187 billion in the past seven days, indicating continued interest from large investors in the cryptocurrency market.
The recent Bitcoin price crash following the new all-time high can be partially attributed to the reactivation of a dormant whale address holding a significant amount of BTC. The sudden selling pressure from the dormant whale, combined with profit-taking from other investors, led to the price decline. While market recovery has occurred, the incident underscores the influence that large holders can have on the cryptocurrency market and the need for caution when dealing with such entities. Investors are advised to conduct thorough research and consider the risks involved in trading and investing in cryptocurrencies.