Bitcoin plummeted more than 7 percent on Monday, after a whale had deposited 18,000 BTC into a Gemini wallet.
The flagship cryptocurrency fell to an intraday low of $54,568 at 0940 UTC, down 7.47 per cent at the European Session. His reversal began on Sunday after the price had hit a new record high above $61,000. Traders used the renewed peak to protect their gains, lowering costs. However, after the aforementioned Gemini deposit, the sell-off accelerated.
Analysts around the cryptocurrency industry viewed the allocation of $1 billion to the US exchange as a warning of a big dump ahead. CryptoQuant CEO Ki-Young Ju was able to find out the connection between higher bitcoin inflows and spot prices. He released a chart showing an increase in Gemini’s bitcoin inflow on February 21, followed by a downside reversal of more than 26%.
Bitcoin painted two high-volumed red candles on its four-hour chart just as the Gemini news went viral across social media, illustrating panic selling among retail traders. On the whole, the cryptocurrency shed almost 10 percent, or about $6,000, of its valuation in the previous six hours.
Markets selling off due to bogus data saying $1b of BTC flowing into Gemini.
It’s the 2nd time it’s happened in the last 30 days.
— Willy Woo (@woonomic) March 15, 2021
Analysts view huge inflows to cryptocurrency exchanges as a bearish warning. Traders usually pass Bitcoin to their wallets when they intend to exchange them later to deal with cryptocurrencies or fiat money. Conversely, bitcoins would be excluded from their trading addresses if they want to keep the cryptocurrency.
“This 18k BTC deposit is legit as it was a transaction between user deposit wallets and Gemini hot wallet,” noted Mr. Ju. “All Exchanges Inflow Mean is skyrocketed due to this deposit. Don’t overleverage if you’re in a long position.”
Around $1.41 billion worth of long entries got liquidated in the last four hours, according to “rekt” data provided by ByBt.com.
After Monday’s sharp downturn, the technical chartists moved their downside goals to $50,000 lower.
The Independent Analyst observed that the BTC/USD exchange rate could sink to $51,860, a level that acted as a resistance to nearly $43,000 during the year-to-date low rebound of the pair. This is partially due to the BTC/USD decline below its local support area of about $58,000. (the redded range in the chart below).
“The day is still young so [the] price could still resolve itself relative to this red boxed area and turn it into support,” the analyst added. “Technically, BTC is in the process of a volatile retest.”
In the short term, Bitcoin was checking the 50-day simple moving average wave as help.
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