The Bitcoin price briefly dropped to under $10,000, causing the whole crypto market to slump within a short time period.
The price of Bitcoin dropped across major exchanges on September 5, which marked 2 consecutive days of crucial level testing. Other cryptocurrencies, including Ether, fell by about 10%.
When Bitcoin price dropped by 5% to $9,975, BitMEX liquidations were under $40 million. Normally, when a massive price drop occurs, it may cause over $100 million worth of wipeout in futures contracts.
While possible, there is a small probability that the retail investors began to dump belligerently at over $10,500. As per futures data, the selling pressure came from the spot market.
Whales taking profit at $10,500 has historically served as a multi-year resistance level for Bitcoin, which is more likely.
But the thing is that whales have been picking up profit since Bitcoin came at $12,000. As Cointelegraph reported previously, a whale sold Bitcoin at 12,000 USD after “HODLing” it for more than 2 years.
Last week, CryptoQuant, the on-chain data provider, stated that mining pools were taking profits. Ki Young-Ju, the firm’s CEO, said:
“Miners send a certain amount of BTC to exchanges periodically, so they already have a large amount of BTC in the exchange. Whenever they decided to sell, it seems they move a relatively significant amount of BTCs to other wallets, and some of them are going to exchanges.”
The steady sell-off of Bitcoin1 by miners since mid of August might have built noteworthy selling pressure on BTC. However, Alejandro De La Torre, Poolin vice president, emphasized that it is perplexing to precisely track sapper outflows. He said:
“I can reassure you that CryptoQuant does NOT know which wallets are owned by Poolin. perhaps it’s a handful of (big) miners they are tracking… even still, many assumptions.”
A conjoint theme during the past 2 weeks — as BTC consolidated — was the consolidation of the U.S. dollar, which began to give signs of recovery after 4 months of hitch while the euro started to slump.
Since both gold and Bitcoin are valued mostly by the USD, and a lot of BTC traders are USD based, the growing value of the US dollar added to the weakening momentum of Bitcoin.