After the price of bitcoin hit a new all-time high above $61,800, it plunged to a $53,000 low before recovering. Behind the sell-off, some believe was BTC whale data suggesting large amounts of bitcoin were being deposited and a dump was incoming.
According to CryptoCompare data, Bitcoin’s new all-time high was hit on March 14, and over the next day the price of BTC started plunging. The CEO of on-chain analytics platform CryptoQuant, Ki Young Ju, at the time pointed out a large inflow was seen moving to the Gemini exchange.
Per his words, the inflows could be related to Gemini running a private brokerage service executing sell orders to other exchanges, or brokerage services using Gemini Custody to execute sell orders.
One of the possibilities the CEO suggest were psychological operations – ‘psyops’ – which suggests the whales were using the popularity of bitcoin inflows on social media to trigger a fakeout. In technical analysis, a fakeout is a term used to refer to situations in which traders enter positions in anticipations of a price movement based on a signal or movement that never develops.
To trigger the fakeout whales could have deposit large amounts of BTC into Gemini, only to have the funds sit on the platform instead of selling them. As other traders anticipated a sell-off they sold their funds, allowing whales to keep buying bitcoin at cheaper prices.
It isn’t clear whether the sell-off was associated with the data showing large inflows on Gemini, but crypto analyst Willy Woo later on used data from another on-chain analytics firm. Glassnode, to suggest the inflows were, in fact, an internal transaction from Gemini that wasn’t properly classified.
Both firms later on seemingly suggested that BlockFi was behind the large transaction, but disagreed on whether the transaction should be classified as an internal one, or as an inflow. The price of bitcoin has since recovered from the sell-off and is currently $55,100.
Featured image via Pixabay.