Bitcoin Plunges Below $51,000: What’s Behind the Decline?
Bitcoin has experienced a drop below the $51,000 level in the past day. Just yesterday, the cryptocurrency surged to $53,000, setting a new high for the year. However, this rally was short-lived as Bitcoin quickly plummeted back down below $51,000.
The coin did manage to rebound above $52,000 shortly after the drop, giving investors hope that it was only temporary. But since then, Bitcoin has once again seen a drawdown towards the same lows.
Ethereum has outperformed Bitcoin during this period, with gains of 5% in the past week. Altcoins, however, have still performed worse than Bitcoin.
BTC Whales Participate in Large Selloff
Analyst Ali points out that BTC whales, entities holding between 1,000 and 10,000 BTC on the network, have recently sold off their holdings. These whales can significantly impact the market due to their large holdings.
A chart shows that whale holdings had been increasing since the beginning of the year until a few days ago when it reversed. This suggests that these investors were accumulating during the rally that pushed Bitcoin above $52,000 but have now decided to take profits.
In this selloff, BTC whales have sold a total of 30,000 BTC worth over $1.53 billion. While this selling pressure may be partially responsible for the recent drawdown in Bitcoin’s price, it’s important to note that not all recently accumulated holdings have been sold yet.
It remains to be seen whether other whales will follow suit and sell or if they will continue to hold strong in anticipation of a turnaround for Bitcoin.
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