Large entities have once again dominated the pioneering crypto, which has seen increased volatility due to price uncertainty.
We can see that a whale traded $432 worth of Bitcoin in block 716,573 some hours ago, at a time when Bitcoin is trading at $47K, using Bitcoin Block Bot, an advanced analytical tracker.
Whale investors (those with $10 million or more in Bitcoin) typically send cryptocurrency from exchanges when they want to store it for a long time.
Because this transaction was not transmitted to an exchange, it’s doubtful that this Bitcoin whale is looking for liquidity. For security concerns, they may be transferring this to another wallet.
The risk of theft is higher when storing large amounts of money on exchanges, as exchange wallets are the most popular targets for cryptocurrency thieves.
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Thus, as these entities accumulate Bitcoin, its circulating supply is reduced, which pushes its price arbitrarily north.
With its current demand factored in, it is possible for BTC’s price to increase as its supply approaches 21 million in the future. It isn’t faring as poorly as it did during past drawdowns, but Bitcoin’s gains for 2021 remain impressive. In comparison to other swoons, it’s experienced, its 30% drop isn’t as dramatic.
At its low, Bitcoin was down more than 50% in mid-2021, which is even worse than the average decline from a record.
In a classic case of “crypto-to-the-moon” thinking, many investors expect prices to recover and eventually reach new heights in the future. Market volatility suggests this could happen either way.