Activation of dormant whale wallet with $43M in BTC raises concerns of potential selloff amid Bitcoin’s recovery.
Bitcoin’s surge past $64K triggers caution among traders due to overbought signals and potential trend reversal indicators.
Shorts dominating liquidations as Bitcoin rebounds, but impact of short squeeze may be limited, keeping market dynamics uncertain.
Bitcoin soared above the $64,000 threshold today, setting a momentous achievement in its current run-up.The resurgence in Bitcoin’s price was accompanied by a noteworthy event – the activation of a dormant wallet containing 687 BTC, valued at over $43 million as per Whale Alert data. This dormant Bitcoin whale, inactive for over a decade, made two substantial transfers to unknown wallets on Monday, totaling nearly $44 million.
💤 💤 💤 💤 💤 A dormant address containing 687 #BTC (43,893,168 USD) has just been activated after 10.3 years!https://t.co/l31uAyadYZ
— Whale Alert (@whale_alert) May 6, 2024
As per Lookonchain, an onchain analytic firm, the first transaction involved the transfer of 625.42 BTC, amounting to a $41 million. The second transfer moved 61.9 BTC, equivalent to approximately $4 million at the time.
The dormant whale acquired this substantial sum of Bitcoin on January 12, 2014, when the cryptocurrency was valued at $917 per coin. The dormant whale’s BTC reserve, initially worth $630,000, has now soared to approximately $43.94 million.
A wallet that has been dormant for 10.3 years transferred all 687.33 $BTC($43.94M) out 10 mins ago.The whale received 687.33 $BTC($630K at that time) on Jan 12, 2014, when the price was $917.Address: 15WZNLACuvcDrrBL2btDErJggnaMQtHh5G pic.twitter.com/tEPqM0CrrK
— Lookonchain (@lookonchain) May 6, 2024
However, this sudden transfer has raised concerns among investors regarding a potential selloff. The significant profit realized by the dormant whale strengthens the possibility of a dump, which could adversely affect Bitcoin’s price amidst its ongoing recovery. A selloff of such magnitude could potentially trigger a decline or sideways movement in the market, providing an opportunity for Bitcoin bears to capitalize on.
Bitcoin/USD 1-Day price chart, Source: Trading view
Despite Bitcoin’s successful rebound past $64,000, traders remain cautious as indicators suggest a potential reversal in the near future. The one-day stochastic RSI trading above the signal line indicates that Bitcoin is currently overbought, signaling a possible downturn.
Moreover, the one-day MACD trading above the signal line suggests strong bearish momentum in the short term, with potential for further downward movement. Traders are advised to monitor for a crossover below the signal line, which could indicate a trend reversal.Additionally, the one-day ADX reading of 25.52 suggests moderate trend strength in the asset, but may not be robust enough to sustain significant price movement. Furthermore, shorts accounted for nearly 95% of total liquidations, according to Coinglass, although the impact of the short squeeze may be limited compared to recent days.
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