A Brief Soar and Sudden Plunge
Bitcoin, the flagship cryptocurrency, soared to a new all-time high (ATH) of $69,000 on March 5, only to experience a swift downturn that briefly dipped below the $60,000 mark. The abrupt price reversal was fueled by a flurry of profit-taking activities from long-time hodlers, alongside notable movements from dormant accounts and large holders looking to capitalize on the ATH.
Whales and Hodlers in Action
Crypto exchanges witnessed a notable influx of Bitcoin, totaling $525 million over three days, indicating a trend of traders moving their assets from cold storage to exchanges to seize profit opportunities. Among the intriguing cases was a dormant whale from 2010, who emerged after 14 years to deposit 1,000 BTC (equivalent to $67.1 million) on Coinbase at a price of $67,116. This move, considering the whale mined these coins when Bitcoin was below $0.28, translated into over $60 million in profit.
Mixed Outcomes for Traders
While hodlers and dormant accounts reaped profits, leveraged traders faced significant liquidations, with over $1 billion in leveraged positions being wiped out due to the heightened price volatility. This marked the largest liquidation day since the previous market cycle's peak, showcasing the risks associated with leveraged trading.
Market Resilience and Future Outlook
Despite the recent sell-offs and flash crash, a significant portion of Bitcoin remains unmoved, with 45% of BTC staying dormant for over three years, and 11% untouched for five to seven years. Market analysts view the recent correction as a healthy adjustment, citing its role in reducing volatility and resetting high funding rates, which signal market optimism among long traders.
Bitcoin has since rebounded, reclaiming ground above $66,000 within 24 hours, showcasing its resilience and potential for continued growth.
