Once again, the pioneering crypto has been dominated by large entities, with increasing volatility due to price uncertainty.
Using Bitcoin Block Bot, an advanced analytical tracker, we can see that a whale suddenly moved $432 worth of Bitcoin in block 716,573 some hours ago, at a time when Bitcoin is trading at $47K.
Whale investors (those who own $10 million or more in BTC) usually send cryptocurrency from exchanges when they plan to hold the cryptocurrency for an extended period of time.
It’s unlikely that this Bitcoin whale is looking for liquidity since this transaction was not sent to an exchange. Rather, they might be transferring this to another wallet for security reasons.
The risk of theft is higher when storing large amounts of money on exchanges, as exchange wallets are the most popular targets for cryptocurrency thieves.
Thus, as these entities accumulate Bitcoin, its circulating supply is reduced, which pushes its price arbitrarily north.
With its current demand factored in, it is possible for BTC’s price to increase as its supply approaches 21 million in the future. It isn’t faring as poorly as it did during past drawdowns, but Bitcoin’s gains for 2021 remain impressive. In comparison to other swoons, it’s experienced, its 30% drop isn’t as dramatic.
At its low, Bitcoin was down more than 50% in mid-2021, which is even worse than the average decline from a record.
In a classic case of “crypto-to-the-moon” thinking, many investors expect prices to recover and eventually reach new heights in the future. Market volatility suggests this could happen either way.