Bitcoin Slumps Sharply Amid Large Withdrawal to Institutional Broker
Bitcoin (BTC) experienced a sharp 5% decline on Tuesday, reverting significantly after setting a new all-time high (ATH) above $123,000 on Monday.
Trigger Point Identified
The steep drop appeared to be preceded by the transfer of approximately 40,000 BTC out of a single long-hold wallet and into Galaxy Digital group on Monday.
This single transaction, valued at around $4.8 billion, represents a substantial sell event impacting market sentiment.
Whale Identity Raises Eyebrows
Data analysis from Onchain Lens has further suggested this sender may be linked to the owner of a significant 90,000 BTC wallet, currently worth $9.6 billion, which last week initiated movement after 14 years of dormancy.
A crypto tracking platform reported on X: “This marks the first cash-out in his Bitcoin history.”
Historical Precedents Fuel Concern
Large-scale Bitcoin sales have historically triggered market volatility. One year ago, a 20% sell-off, equivalent to Germany’s then-$2.3 billion government sale, occurred after a 50,000 BTC withdrawal.
Analysts note concern is amplified here as the responsible entity potentially holds nearly twice Germany’s previous amount, albeit at a much higher price point.
Profit-Taking Adds to Unease
The sharp pullback also coincided with considerable short-term profit-taking following the ATH. Glassnode data indicates roughly $3.5 billion in profits were crystallized once Bitcoin surpassed $123,000.
This behavior is further contextualized by pre-ATH market data suggesting dominant holders, or ‘bagholders’, were poised for sales.
Turbulence Spreads Across the Market
The downturn resulted in more than $450 million in cryptocurrency liquidations across major exchanges. The bulk impacted traders holding long positions – bets on continued price appreciation.
Funding Flows Signal Continued Demand
Despite the sell-off, institutional buying inflows contrast the narrative. Corporate treasury unit Strategy recently deployed $472 million into Bitcoin.
Looking Ahead: Institutional Tide Unabated
Market analysts, like Eric Demuth, CEO of crypto exchange Bitpanda, maintain the long-term Bitcoin trajectory is upwards, pointing to sustained institutional and sovereign capital inflows.
“We will see a gradual convergence with gold’s market capitalisation,” Demuth stated. “
Further out, he anticipates a new price regime emerges, pushing beyond the recent altseason-style peaks of $116,000 or $230,000, tied to higher gold parity valuations.
