Bitcoin (BTC) recently fell to $42,300 after reaching $48,969 on Binance following the approval of a spot Bitcoin ETF. Despite hopeful ETF inflows, the massive redemptions of GBTC have started to deplete the company’s substantial BTC reserves. The price stagnation prompted whales to act, leading to a significant drop on January 12.
James Van Straten from CryptoSlate suggested that the sharp crypto downturn could be due to the actions of a single whale. The 15% drop in Bitcoin’s value on January 11, which started at $49,000, was initially tied to a “sell the news” event post-ETF approval.
Analysis of BTC supply and price revealed high activity at the peak, with a whale who accumulated $4.8 billion during the 2021 all-time high selling off their holdings as the price neared $49,000.
Van Straten shared data from on-chain analysis firm Glassnode, highlighting that the size of the whale’s BTC stack could have netted them a $100 million profit, even with just a $1,000 difference in entry and exit points. This triggered a market frenzy, with liquidations, “sell the news” behavior, and record losses.
The market continues to be volatile, with large-scale liquidations damaging the bullish sentiment. More supply is being sent to Coinbase, ready for sale, while Grayscale reserves are dwindling. The ongoing fear in the market is unlikely to subside without a decrease in GBTC sales. Van Straten also doubts that FTX has liquidated its GBTC position yet, indicating potential ongoing pressure. The upcoming Fed meeting and a prolonged highly profitable environment suggest that bulls may need to rest for a while longer.