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Bitcoin leads the broader cryptocurrency market down 4.5%, pushing the entire sector below the $1 trillion market cap threshold.
Important points
- Bitcoin (BTC) is down more than 6% today, trading to a low of $18,644 at press time, according to CoinMarketCap.
- The world’s most valuable cryptocurrency hasn’t been this low since June.
- Media reports suggest that holders of large amounts of BTC have moved a significant number of bitcoin — up to 15,000 coins — on crypto exchanges, suggesting a potential sell-off for the digital asset.
As of Wednesday, the top crypto asset — Bitcoin (BTC) — was trading at just $18,644 per coin on cryptocurrency exchanges, down more than 6% over the past 24 hours, according to CoinMarketCap.com. The entire cryptocurrency sector is experiencing a severe downturn dubbed “crypto winter” as asset prices, trading volumes, and digital portfolio values have fallen fast and far for most of 2022.
However, in the past 24 hours, Bitcoin’s price drop has dragged the entire asset class down nearly 5%, bringing the total market cap for the category below the psychological $1 trillion threshold to $949.20 billion. Ironically, even during the crypto market’s peak last November, Bitcoin had surpassed a $1 trillion valuation.
Bitcoin whales seem poised to sell large amounts of BTC
Bitcoin’s recent price drop may have been caused by a significant inflow of BTC from digital wallets to crypto exchanges by investors with large amounts of the digital asset — known as bitcoin whales. According to media reports, the CEO of crypto analytics site Cryptoquant has noted that up to 15,000 bitcoins have recently been moved from private wallets to public trading platforms.
This surge suggests that bitcoin whales, who bought at much lower prices, may be looking to sell and take profits in the current price range. In this case, that amount of volume would push the price of Bitcoin even further down. So, it is highly likely that the past day’s price action could be the result of an early departure from BTC holders who are not willing to wait and see what happens.
Is Bitcoin a Buy?
However, for anyone not currently invested in Bitcoin, the best course of action in the short-term is to wait and see what happens to see if the price dips lower. Bitcoin is already at 72% of its all-time high of $68,789 per coin (set on November 10, 2021). According to the Bitcoin Rainbow Chart published on BlockchainCenter, the price of BTC is currently at historically low “fire sale” levels.
Every investor needs to understand their own risk tolerance, how much they are willing to lose and what assets they plan to invest financially. Bitcoin has proven itself as a crypto performer, posting triple-digit returns on an annualized basis over the past decade. While a wait-and-see approach makes sense during the current downturn, crypto-curious investors should know that prices for premium digital assets like Bitcoin won’t stay this low forever.
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