Bitcoin (BTC) Price Drops 2% as Whales Deposit Large Amounts to Binance, Signaling a Bearish Market

Bitcoin (BTC) price decreased by over 2% on the last day as whales put more selling pressure in motion.

Bitcoin price dropped over 2% on the last day as large movements of Bitcoin depositing to Binance have been reported. This indicates that these BTC whales may wish to take profits or even dump positions soon.

Currently, the Bitcoin price is trading below $56,000. Traders and investors are focusing on such shifts, which indicates further bearishness.

One of the most significant transactions was that the whale exchanged 1000 BTC for 55.63 million dollars. This move has garnered some attention, especially when the whale lost about $2.97 million in the transaction.

Seasonal changes in whale activity may affect the market sentiment. Therefore, the large transfer might signal an intention to sell much more shortly. This comes as outflows keep rising from Bitcoin ETFs, signalling an unstable market.

The whale deposited 1,000 $BTC($55.63M) to #Binance 30 mins ago, losing ~$2.97M!https://t.co/KdVmf14vF4 pic.twitter.com/xQLFmcgW4d

This is concerning, especially if one considers another whale active in the BTC market. Another whale deposited 380 BTC or $21.34 million four hours before this transaction to Binance.

The contiguity of these two steps has stirred the market and raised conjectures that large holders may be planning to sell. Payments of such scale towards exchanges such as Binance entail infusing cash into the market with the view of withdrawing or redirecting. This, therefore, exerts a bearish influence. This marks the second major outflow by whales this week.

A whale deposited 380 $BTC($21.34M) to #Binance again 4 hours ago.And the whale has deposited a total of 4,544 $BTC($265M) to #Binance in the past 7 days.https://t.co/yCAMkUhWQR pic.twitter.com/CgeiM2NWYw

What BTC Whale Activity Tells Us

The current transfers occur in the wake of an array of mass withdrawals by the same wallet. Between August 29 and September 3, the whale withdrew 2,322 BTC at an average price of $58,597 for each BTC. This position was valued at about $136m at the time of the decision. However, with the current price of Bitcoin at around $55,799, this position is now assumed to hold a net loss of $6.94 million. This represents a 5.1% decrease.

Such a switch in behaviour from withdrawing BTC to depositing whopping amounts back to Binance within a short period can mean that the whale is either bearish or bullish. It implies that the whale may expect a further price drop and would thus prefer to cut losses before the market deteriorates.

Market Reaction and BTC Price Decline

In response to these massive whale transactions, Bitcoin’s price fell below $58,000. Today, it stands at $55,799, to the dismay of the traders. Owing to this, Bitcoin’s market capitalization fell to $1,1 trillion, down 2.09% for the day.

In addition to that, the 24-hour trading volume increased by 6.15%, reaching $32.23 billion. That is, during the time traders react to these movements by so-called ‘large whales’ and try to align their positions correspondingly.

From a technical point of view, Bitcoin’s price has become more volatile in the recent past. The 4-hour chart shows that the Bitcoin price has gone below the 20-day MA while the Bollinger Bands have expanded to convey heightened volatility.

Bitcoin is trading with the price around the lower band. This implies more downside movement if the price falls further. These technicals are in sync with the overall mood of the market, which is currently pointing towards a consolidation phase with the possibility of further downside.

Supplementing the technical analysis, there is a momentum indicator known as the Money Flow Index, which currently reads 39.24. This indicates that Bitcoin is near oversold levels.

Although this means that selling can return to normal, it does not mean there will be an immediate turnaround, as bearish sentiment might continue if other whales or other outside factors happen to occur.

Broader Market Sentiment

The large buyers’ activity in the Bitcoin market in recent times has created volatility. Large whales have been proven to be able to move Bitcoin’s price due to the large volumes they trade. Consequently, every time these whales transfer their funds to exchanges such as Binance, other investors worry about potential consequent sales.

Hence, when the whales moved large volumes of Bitcoin to an exchange and initially withdrew Bitcoins at a higher price, it indicated a

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