What happened to the Bitcoin Market & What is to Come?

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After struggling to break out and above $11,000, to then trading sideways for most of the week, Bitcoin took an unexpected and substantial tumble that saw the price of the cryptocurrency slump to a level below $10,000, coming close to the bottom half of $9,000.

It has been hard to understand what caused this sudden collapse, especially in the light of its rise being attributed to its possibility as a global hedge against the growing economic uncertainty. At first, most traders and commentators were silent on the reasons, but theories are emerging. 

This latest drop may have something to do with a large sum of money being moved by a whale, as was noted by transaction tracking twitter account, Whale Alert. This could explain the drop, and especially considering there is talk of a $2 Billion Bitcoin dump coming from the outcome of a court case involving Craigh Wright. 

Making a splash

It was noted that there was a rather large $120 million buy wall on cryptocurrency exchange Bitmex, which stood out as quite an anomaly in the trading market. This could well have had something to do with the recent drop as one trader, CryptoMonk, suspects that the buy wall was “someone trying to unload some corn.” 

What this means, in simpler terms, is a large seller potentially threw up a buy wall to maintain Bitcoin price while unloading from their own stack. Another theory suggests that the buy wall manipulates prices to meet a trader’s asks. At the end of the day the whole thing broke down and resulted in a $144 million liquidation of longs on BitMEX.

On top of this, there has also been some big trades that have been noted on the Bitcoin blockchain. 

Whale Alert flagged an 8,180 BTC ($82 million) transfer from one unknown wallet to another unknown wallet. This was the third massive transfer to take place over the past three days. 

Just a day earlier 12,000 BTC ($124 million) was transferred and on August 24, 33,706 ($341 million) was transferred. Figures like that are often seen in the Bitcoin market, however,the fact that they were so close together - seeing half a billion dollars move over three days, is something to registers, especially considering these transfers are being consolidated within a single address. 

Next step?

Many are fearing that Bitcoin’s bull run may well be coming to an end before it has even had a chance to properly flourish, however, there are those who are being a little more optimistic and relaxed. 

For example, Mike Novogratz suggests that people consider this as a consolidation phase as the cryptocurrency is still up over 200 percent this year. More so, there are suggestions that Bitcoin is coming into an accumulation phase as suggested by Philip Swift’s Bitcoin Golden Ratio indicator.

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