Bitcoin fell more than 7 percent on Monday after a whale deposited 18,000 BTC in a Gemini wallet.
The flagship cryptocurrency fell at 0940 UTC to an intraday low of $ 54,568, a 7.47 percent decrease from the European session. The correction began on Sunday after the price hit a new record high above $ 61,000. Traders took advantage of the refreshed peak to secure their profits and lower prices. Nevertheless, the sell-off accelerated after the aforementioned Gemini deposit.
A $ 1 billion bitcoin sales order
Analysts in the cryptocurrency market interpreted the $ 1 billion transfer to the US exchange as a sign of a major dump. Ki-Young Ju, CEO of CryptoQuant, was quick to point out the correlation between higher Bitcoin inflow and its spot prices. He posted a chart showing an increase in Bitcoin inflow from Gemini on February 21, following a downward revision of more than 26 percent.
Spot Bitcoin and its correlation with the inflow / outflow of twins. Source: CryptoQuant
Bitcoin painted two high-volume red candles on its four-hour chart when the Gemini news went viral on social media, illustrating the panic selling among retailers. Overall, the cryptocurrency has lost nearly 10 percent, or about $ 6,000, of its valuation in the past six hours.
Markets are selling on fake data that says $ 1 billion of BTC is pouring into Gemini.
It’s the second time in 30 days.
Graphic: Leverage positions are liquidated when traders sell. Red dots indicate the time of the wrong inflows. (28,000 or 18,000 BTC) https://t.co/bQ8WvajyEJ pic.twitter.com/FtMPW2Oy03
– Willy Woo (@woonomic) March 15, 2021
Analysts interpret massive inflows into cryptocurrency exchanges as a bearish signal. Merchants usually transfer Bitcoin to their wallets because they later want to exchange them for competing cryptocurrencies or fiat currencies. Conversely, they withdraw bitcoins from their exchange addresses if they want to keep the cryptocurrency.
“This 18k BTC Deposit is legitimate as it is a transaction between User Deposit Wallets and Gemini Hot Wallet, ”said Ju. “All of the inflow mean exchanges have shot up because of this deposit. Don’t overcheck when you are long. “
According to “rect” data provided by ByBt.com, long entries worth approximately $ 1.41 billion have been liquidated in the past four hours.
“Volatile retest”
Technical chartists have moved their downside targets to the lower $ 50,000 after Monday’s sharp decline.
An independent analyst stated that the BTC / USD exchange rate could fall towards $ 51,860, a level that served as resistance during the pair’s rebound from the previous year’s low near $ 43,000. This is partly due to BTC / USD falling below its local support area of around USD 58,000 (the red area in the chart below).
Bitcoin slips below the specific support area identified by Rekt Capital. Source: BTCUSD on TradingView.com
“So the day is still young [the] Price could still resolve itself on this red boxed area and turn it into support, ”added the analyst. “Technically, BTC is in a volatile retest. “
For the short term, Bitcoin tested its 50-day wave with simple moving average as support.
