The whales circled as the bitcoin price swooned, sensing the tried-and-true “blood on the street” situation had arrived.
And, according to a recent market report by blockchain analytics company Chainalysis, they moved in when bitcoin fell to $30,000 recently.
The firm’s chief economist Philip Gradwell said those investors took advantage of some panic selling and bought 77,000 bitcoin last week, now worth over $3 billion.
As bitcoin dipped to its 2021 low just more than a week ago, many investors opted to liquidate a considerable amount of their Bitcoin holdings at a loss.
Specifically, the report said, about $3.2 billion worth of bitcoin was sold at a loss — 1.2 million Bitcoin moved at 5 to 25% loss while 120,000 Bitcoin was sent at a 25% loss or worse.
Those institutional investors — “whales” — were waiting to increase their holdings, just watching for the right opportunity.
The report said it was not the giant crash many bitcoin enthusiasts feared:
“However, this was a smaller number of bitcoin sent at a loss than in the late 2017 and mid-March 2020 price crashes, suggesting that last week was not the worst capitulation of holders in Bitcoin’s history.”
Bitcoin has seen its roller-coaster ride caused by several factors, including Elon Musk’s ever-changing opinions, along with the Chinese government’s actions regarding the future of that country’s digital currency.
The dramatic sell-off was not confined to bitcoin among the cryptocurrencies. Ethereum, according to the report, saw 22.6 million transferred at a 5-to-25% loss.
Gradwell concluded that, while the recent run was bad, “the industry appears to be responding and most investors remain confident.”
Bitcoin was trading at $37,090 approaching noon ET on Monday, up about 8.8 percent over the past week, but significantly off its high of just about $60,000 earlier this month.