Significant Drop in Whale Transactions
Bitcoin has recently experienced a notable price drop, falling below the $63,000 mark. This decline is closely linked to a significant reduction in large-scale Bitcoin transactions.
Over the past two days, transactions exceeding $100,000 have plummeted by 42%, from 17,091 to 9,923, as reported by Santiment. This decrease in whale activity comes at a critical juncture, coinciding with Bitcoin's price slipping from $64,685 to $62,531.
Market Sentiment Shifts
The shift in whale behavior reflects a broader change in market sentiment. According to Ki Young Ju (1), CEO of CryptoQuant, whale traders on derivatives exchanges have adopted a risk-off stance.
This bearish sentiment is evidenced by the inter-exchange flow pulse (IFP) turning red, indicating an increase in Bitcoin withdrawals from derivatives exchanges. These platforms are typically used for financial contracts based on Bitcoin's future price, and the withdrawal activity suggests a cautious outlook among large traders.
- Whale Transactions Decrease: 42% drop in transactions over $100,000
- Current Price: $62,531, down from $64,685
- Sentiment Indicator: IFP turning red, signaling market caution
Crypto Fear and Greed Index Declines
The Crypto Fear and Greed Index, a tool used to gauge overall market sentiment, has also seen a notable shift. It has dropped to a "Neutral" score of 51, the lowest level in 51 days. This change in sentiment follows Bitcoin's earlier dip below the critical $60,000 level. Additionally, spot Bitcoin exchange-traded funds (ETF) have recorded outflows over the past six trading days, with the largest outflow being $226.2 million on June 13.
"Whale traders on derivatives exchanges are in risk-off mode," stated Ki Young Ju in a June 23 X post. This sentiment is further supported by the decline in the IFP.
Diverging Opinions on Bitcoin's Future
Despite the current bearish trends, some analysts remain optimistic about Bitcoin's future. James Check, the lead analyst at Glassnode, highlighted the Bitcoin Sell-side Risk Ratio as a positive indicator.
- Fear and Greed Index: Dropped to 51, a "Neutral" score
- ETF Outflows: Largest outflow was $226.2 million on June 13
- Analyst Insight: James Check sees potential for market movement
He noted that the ratio has reached levels suggesting the market is ready to move. According to Check, "All the profits that were going to be taken, have been. Same for losses." He believes that Bitcoin needs to "find a new price range to stoke the fire of fear, greed, panic, or euphoria."
