Bitcoin, which recently dipped to $42,488, might have experienced a $9,000 plunge last week due to the actions of a single whale, according to a new theory.
The Whale’s Massive Holdings
The 15% decline in Bitcoin’s price, which began on January 11, is often attributed to a “sell the news” event following the United States’ approval of spot exchange-traded funds (ETFs).
However, a new theory has emerged. James Van Straten, a research and data analyst at crypto insights firm CryptoSlate, pointed to a significant entity selling BTC in a post on X (formerly Twitter) on January 18.
This is why (in my opinion) on Jan. 12, #Bitcoin had its largest 1-day drawdown since the FTX collapse and tanked after the ETF started trading.
A massive whale that bought in the 2021 bull run at $48k had over 100k BTC and sold at $49K in 2024.
I assumed they would have… https://t.co/RsusFpcV6x pic.twitter.com/vpOGLa3n5U
— James Van Straten (@jvs_btc) January 18, 2024
Van Straten analyzed the realized price of the BTC supply – the price at which coins were last moved – and noticed a significant decrease at the price highs.
His research implicated an unknown entity that had purchased a massive 100,000 BTC during Bitcoin’s run to all-time highs in 2021, worth $4.8 billion at the time.
Last week, after enduring the subsequent BTC price drawdown, this whale finally reached a breakeven point – and the opportunity to sell at $49,000 was too tempting to resist.
“This is why (in my opinion) on Jan. 12, Bitcoin had its largest 1-day drawdown since the FTX collapse and tanked after the ETF started trading,” Van Straten wrote alongside data from on-chain analytics firm Glassnode.
Even with just a $1,000 difference between the entry and exit prices, the size of the whale’s BTC holdings would have yielded them a significant $100 million profit – a substantial gain despite enduring Bitcoin’s longest-ever bear market.
“I assumed they would have held due to holding a 75% unrealized loss,” Van Straten continued.
“This then sent the market into a frenzy, combined with liquidations, ‘sell the news,’ and record loss-taking.”
Major BTC Sales May Not Be Over
As previously reported, the post-ETF market decline triggered widespread liquidations among traders, raising concerns of a vicious cycle of losses from which BTC/USD has yet to fully recover.
The impact of institutional access to Bitcoin has yet to exert its full influence on the markets in terms of supply constraints and related price increases.
The scale of the potential whale sell-off was so significant that it rivaled ETF activity itself, including rotation out of the Grayscale Bitcoin Trust (GBTC).
“For context, $GBTC has only sold 27k Bitcoin with similar demand for inflows into the ETFs. That’s not enough IMO. I don’t think FTX has liquidated its GBTC position yet, either,” Van Straten concluded, hinting at the possibility of further sell-side pressure in the future.
