Bitcoin’s price saw a sharp decline Monday, erasing all gains made following Federal Reserve Chair Jerome Powell’s recent speech. The sudden drop, which briefly pushed the cryptocurrency below the $111,000 mark, is being attributed to a massive sell-off by a single large-scale holder, colloquially known as a “Bitcoin whale.” The move has reversed the optimism that briefly swept through the market, with other major cryptocurrencies like Ether and XRP also experiencing significant losses.
A Sudden Sell-Off
According to multiple crypto media outlets and blockchain data, the flash crash was triggered when a whale began liquidating a substantial portfolio. In a span of less than ten minutes during overnight trading, Bitcoin’s price plummeted over 2%, from $114,666 to $112,546. Blockchain data firm Timechainindex.com reported that a single entity sold off 24,000 BTC, valued at over $300 million. Researchers noted that this whale, who holds a total of 152,874 BTC across related addresses, had been inactive for approximately six years, with the funds originally transferred from the HTX exchange. “The entity has been actively selling today… which is likely contributing to the price drop,” a researcher from the firm stated on X.
Market Reverses Course
The sell-off completely wiped out the rally that began last Friday after Fed Chair Powell’s dovish remarks at the Jackson Hole symposium. Powell suggested that the long-term inflationary impact of President Donald Trump’s tariffs would be minimal, signaling a greater willingness to consider interest rate cuts. This spurred a risk-on sentiment in the markets, causing both U.S. stocks and Bitcoin to climb, with Bitcoin rising nearly 4% from $112,500 to $116,900. However, the cryptocurrency failed to test the $120,000 resistance level before momentum stalled. The weekend saw analysts expressing confidence that a potential September rate cut could propel both Bitcoin and Ether to new all-time highs, a sentiment that has now been tempered by this sudden downturn.
Technical Levels Tested
Following the flash crash, Bitcoin’s price fell below its 50-day moving average, a key technical indicator. One analyst noted that “the S&P 500’s surge on Friday likely triggered profit-taking from investors waiting for a rally, pushing Bitcoin below this critical support.” The price is now hovering around its 100-day moving average near the $111,000 level, a crucial point that could determine the market’s next direction. Ether, which had just reached a four-year high last week, also saw its gains evaporate, falling over 4.1% as the broader crypto market pulled back.