Bitcoin price soared to a historic peak of $69,000 on March 5th; however, this momentous achievement was short-lived as the value of BTC quickly plummeted below $60,000 in a flash crash. The sudden crash was attributed to a wave of selling by long-time Bitcoin holders, as numerous large-scale investors and dormant accounts decided to cash in on their holdings.
Data from CryptoQuant reveals that over a span of three consecutive days, crypto exchanges saw an influx of BTC worth a staggering $525 million. This suggests that traders were transferring their Bitcoin from cold storage to exchanges, with the intention of taking profits in anticipation of the all-time high.
One particular case that caught the attention of the crypto community involved a dormant whale who reemerged after 14 years to deposit 1,000 BTC (equivalent to $67.1 million) into Coinbase. This transaction took place when the price of Bitcoin was trading at $67,116. It is worth noting that this whale had originally mined the Bitcoin back in 2010, when its value was below $0.28. This astonishing revelation implies that the whale has earned over $60 million in profits.
While Bitcoin holders were able to capitalize on their investments, traders who utilized leverage were not as fortunate. The extreme price volatility resulted in over $1 billion worth of leveraged positions being liquidated, making it the largest liquidation day since the previous market cycle’s peak.
Additionally, the Bitcoin binary spending indicator indicates that many Bitcoin holders also profited from the surge in BTC price to $69,000. This indicator showcases the movement of Bitcoin funds throughout the years, based on their supply timeline.
Coinbase also saw a significant increase in selling volume during a daily candle, marking the highest volume since the crash experienced on the FTX platform. This surge in selling activity further emphasizes the heavy selling pressure in the market.
Despite the recent selling and flash crash, not all Bitcoin holders are eager to part ways with their digital assets. According to CryptoQuant data, 45% of Bitcoin has remained untouched for over three years, while 11% has not been accessed for a period of five to seven years.
Cryptocurrency analysts view the recent flash crash as a healthy correction for the market, as it helped to alleviate high volatility and reset the elevated funding rates. Funding rates measure the difference between the futures and spot markets, and high rates indicate excessive optimism in a market predominantly driven by long traders.
Within a span of 24 hours, Bitcoin managed to recover and climb back above $66,000, coming within a mere 4% of its all-time high.
In the world of cryptocurrency, there are concerns about what the future may hold if Bitcoin were to reach a staggering price of $1 million. The Wolf Of All Streets, a well-known figure in the industry, has expressed worries about the potential consequences of such a scenario.