Bitcoin drops below $10,000 as whales dump $45B in bets
What's the story
Bitcoin has witnessed a major downturn, falling as much as 7.4% and dropping below the $10,000 mark for the first time since June. The fall is a decline of over 20% from its recent peak reached last month. The current slump is different from previous ones, which were triggered by sudden market movements due to futures market liquidations. This is driven mainly because of large holders ('whales') exiting their market positions and booking profits.
Market impact
$2 billion in crypto positions liquidated in last 24 hours
In the past 24 hours, roughly $2 billion in crypto positions have been liquidated, according to CoinGlass. Bitcoin futures open interest remains subdued with put contracts eyeing the $80,000 level. Vetle Lunde, head of research at K33, highlighted that over 319,000 Bitcoin has been reactivated in the past month, primarily from coins held six to 12 months. The trend shows major profit-taking since mid-July, highlighting an imbalance between selling by long-term holders and buying by new market entrants.
Market imbalance
'Mega whales' start selling
Markus Thielen, head of 10x Research, revealed that "mega whales"—entities holding between 1,000 to 10,000 Bitcoin—have started offloading large amounts. This was seen earlier this year and explains Bitcoin's sideways movement during the summer. However, since the October 10 crash, overall demand has declined as long-time holders have sold around 400,000 BTC in the last month—an exodus of about $45 billion that's left the market unbalanced.
Market shift
Potential for further declines
The accumulation by parties holding between 100 BTC and 1,000 BTC has dropped sharply. Thielen warns that this unwind could continue well into next spring, similar to the 2021-2022 bear market when large holders sold over one million Bitcoin over nearly a year. He isn't predicting a catastrophic plunge but sees potential for further declines with $85,000 as his maximum downside target.