Implications of Bitcoin’s Weekend Decline for Crypto Optimists

A large seller’s order over the weekend has caused a flash crash in the largest cryptocurrency, leading to more than $500 million in forced liquidations.

The liquidation of 24,000 BTC, valued at $2.7 billion, resulted in a 3.74% drop in under ten minutes, leading to $623 million in liquidations according to data from CoinGlass.

Nonetheless, Bitcoin is up 2.41% from its weekend low of $110,484 and is trading near $113,169, according to CoinGecko data.

“It should become considerably easier to increase once the short-term momentum clears and prices surpass $113,500 – $114,000,” noted Alex Krüger, a crypto trader and founder of Aike Capital, on Sunday via X.

Despite the volatile price movements, some analysts suggest that this sell-off might not indicate a bearish sentiment, but rather an essential aspect of a maturing market.

“The halt in price movement occurs because several whales have reached their desired levels and are now unloading,” Vijay Boyapati, an expert in crypto and economics, shared on X.

He emphasized that whale selling is a natural occurrence and is “necessary for Bitcoin’s full monetization.”

The whale still maintains a substantial holding of 152,874 BTC, valued at about $17.3 billion, according to Sani, a Bitcoin on-chain analyst.

The sell-off was likely exacerbated by market conditions such as “low weekend liquidity” and a “buildup of leveraged long positions” over the previous week, noted Sean Dawson, head of research at the on-chain options platform Derive, in remarks to Decrypt.

Options data from Derive indicates “bullish sentiment for Bitcoin around the $135,000 to $155,000” strikes, while the recent “drawdown has hardly affected bullish traders,” Dawson pointed out.