Bitcoin price depreciated by over $3000 in the last three days to $16,806 per coin following the transfer of almost $1 billion worth of Bitcoins from wallets to exchanges by bitcoin whales.
Also, almost $2 billion worth of derivative positions have been liquidated in the last 24 hours while $1.6 billion worth of positions have been closed in the last 12 hours, according to data from Bybit.
Bitcoin Whales are individuals or groups that own 1000 BTC or more in a single wallet.
The world’s most dominant cryptocurrency Bitcoin rose from $10,000 to $19,400 per coin in the last seven weeks due to global uncertainty and the negative impact of COVID-19 on traditional assets.
However, it was the report that the United States Treasury Department plans to track owners of self-hosted cryptocurrency wallets that halted the bullish run and forced a pullback as whales that preferred to remain anonymous have started moving their coins to protect earnings against potential taxes.
Alex Kruger, Coinbase CEO, said “This [regulatory concerns], against a backdrop of euphoria and unsustainable high leverage among longs led to the largest 24-hour drop since March.”
Quoting Brian Armstrong, who first tweeted about Treasury Department’s plan to track Bitcoin Whales, Kruger said bitcoin and the entire cryptocurrency space could turn extremely bearish if that tweet turned out to be true. However, he said it is highly unlikely in the short-term.
He said “if what Armstrong talked about comes to be, it would be extremely bearish. As of now, I see that as highly unlikely (in the short-term).”
Kruger added that OKEX’s recent announcement that it has resumed withdrawals might have amplified the bearish trend that led to over a $3000 plunge in bitcoin value.
“Most of the frozen bitcoin [on OKEx] had traded up around 70%, so there were a lot of unrealized profits locked up there,” Sui Chung, CEO of CF Benchmarks, said in a statement. “Once these coins were free to move, it’s likely many traders sold them for dollars and stablecoins to realize those gains, adding greater momentum to the selling.”