Bitcoin Price Hit By Crypto Bloodbath As Whales Sell En Masse

Bitcoin

In what could be seen as an indication of a coming crash, large-scale Bitcoin (BTC) sellers, known in crypto parlance as ‘whales,’ have come out in force over the past few days by selling or redistributing their token.

On-chain data shows that the number of Bitcoin addresses holding more than 10,000 BTC has declined by almost 5% and that each of these addresses, including those of at least four whales, have liquidated a total of $430 million worth of BTC with 90% of all liquidations being on the upside.

When an exchange closes a trader’s leveraged position, it is referred to as a liquidation. This safety mechanism is put in place in order to protect the trader from a partial or total loss of their initial margin.

If the price of the underlying asset – BTC in this case – moves against the position taken by the trader, the exchange will close out the position and the trader will incur a loss. Liquidations can be a result of many different factors, but they typically occur when there is a sudden and drastic change in the market price of an asset.

With the price of Bitcoin tanking more than 4,000 points since April 6, some are wondering if these red flags should not be ignored, and that those holding BTC and other digital assets – given their correlation to the apex cryptocurrency – should consider selling off their holdings before prices plummet any further.

Others contend that this is simply a market correction and that cryptocurrencies will rebound in time.

Regardless of which side you take, it’s important to understand that BTC’s future price action depends on its ability to hold above two crucial support levels: the $40,000 as the immediate support for the asset, and the $38,000 level.

Bitcoin’s bulls and bears are currently in a stalemate, with the cryptocurrency stuck in a tight range between $39,500 and $40,500. This uncertain price action is likely to continue until BTC can decisively break above the $40.000 psychological mark. The move could see the world’s most capitalized digital asset surge toward $45,000 or even $50,000. However, if Bitcoin fails to hold the $40k level, it would then try to find support at around $38,000. Further downside puts the $35,000 area in focus for Bitcoin price.

@AltcoinSherpa, a knowledgeable educator in the space, sees Bitcoin’s current trading range as a deviation from the uptrend. In fact, he notes in a tweet that he wouldn’t be surprised to see the cryptoasset tapping low 30ks.

The recent failed retest of $40,000 by Bitcoin implies that there could be further correction in the asset’s price. This is based on the fact that after breaking above this level, the digital asset failed to maintain its momentum and quickly fell back below.

This could mean that the rally attempt by the bulls lost steam and that a further correction could be in store.

On the other hand, a long squeeze scenario could be in play if long positions start piling up. Such development could cause Bitcoin price to take a turn and attempt a retest of the $50,000 mark.

That said, the cryptocurrency market is incredibly volatile and often influenced by large-scale selloffs. It’s important for investors to do their own research and stay up-to-date on the latest news in order to make informed decisions about their investments.

Disclaimer: The information provided is not trading advice

Jasper - The Real Deal!

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