At press time, the father of cryptocurrency is trading for just under $8,000 (about $7,973). While this is a little less than where it stood during our previous price piece (slightly over $8,000), the currency is still managing to keep up a respectable momentum.
Bitcoin Is Still First in the Crypto Race
For example, just a few days ago, bitcoin dropped down by more than $1,000, falling to $6,400 in mere minutes. From there, however, it rose back to $7,100 within a short period, and has since added another $800+ to that price. The currency has strength and is fighting its typically volatile nature and all the elements that might influence it. Thus far, it’s winning.
Chart by tntsunrise
One of the potential reasons behind the crash that occurred early this week may have been a sale initiated by a longtime bitcoin whale. A crypto whale is someone who holds large amounts of a specific cryptocurrency in a digital wallet (usually not an exchange). A whale typically won’t ever sell the currency and continues to hold onto it, hoping it will grow. Most of the time, whales refuse to part with funds, which is why when a sale does occur, it has a big influence on the market.
A large sell order occurred on the popular cryptocurrency exchange Bitstamp and may have involved a bitcoin whale moving the funds over from a single digital wallet to the exchange. Bitstamp later tweeted about the event, commenting:
A large sell order was executed on our BTC/USD pair today, strongly impacting the order book. Our system behaved as designed, processing and fulfilling the client’s order as it was received.
Simon Peters, a senior analyst at the popular cryptocurrency exchange e-Toro offered his own sentiment about the sale, explaining:
Bitcoin’s blip appears to have been caused by a significant sell order placed on the Bitstamp exchange early this morning, which triggered selling across other exchanges. Whether this order was a deliberate dump, or a fat finger error remains to be seen.
Peters also stated that the event was a reminder that:
Crypto assets still operate in a nascent market, which is susceptible to significant price moves by whales.
Don’t Worry Too Much Just Yet
However, he also told traders and enthusiasts not be alarmed by the move, as he was confident bitcoin’s price would recover within a short period:
Given the positive sentiment in the market over the past few weeks, it’s likely that the price will recover soon.
Overall, its strange that the notion of one whale cashing out would potentially cause others to follow suit. What this potentially shows is that most long-term traders don’t have the patience they claim to have when it comes to bitcoin and other forms of crypto and seek to cash out as soon they make a little profit.
Bitcoin Charts by TradingView
Image(s): Shutterstock.com
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