As the world’s largest cryptocurrency, Bitcoin [BTC] often takes the lead when the market falls or rises. However, the past 24 hours have proven this assumption to be somewhat inaccurate.
While BTC only rose 4% during this period, the broader market managed to rise 7%. Some altcoins even managed to outperform Bitcoin with double-digit returns. The timing here is worth noting. Especially since these increases came shortly after a market crash that raised nearly $1 trillion wiped out in just over a week.
With that in mind, traders are becoming more cautious, as it seems that everything that can go wrong for Bitcoin will go wrong.
Is there impending sales pressure?
In that light, mega whale Garrett Bullish appears to be feeling the heat of a bearish crypto market. The whale lost about $250 million in the past five days after its liquidation.
At this point, Garrett Bullish appears to be aggressively securing his remaining assets. He deposited more than 5,000 Bitcoin worth $345 million into Binance. The deposits were made in chunks, with the largest position worth approximately $238.72 million.
Source: Arkham
This move could be an attempt to sell to limit losses. Especially since the market appears to be weak despite the slight recovery. Now that the whale may be ready for sale, further price damage could occur.
Liquidations respond to social sentiment
In terms of statistics, the Short-Term Holder P&L to Exchanges showed that Bitcoin experienced the largest liquidation event of the year. This, barely two months after the new year. During the same period, more than 90,000 BTC was wiped out in just 24 hours.
Source: CryptoQuant
This event coincided with Bitcoin’s lowest level of social sentiment in more than four years, accelerating its decline. This also made it difficult for the participants to bounce back and buy the dips.
According to analyst Observations by Ali Martinezsocial sentiment was negative 6.90, while the price was trading around $67,960. This could explain the market-wide fear of Bitcoin, crypto and general risky assets. However, this was the best time to go against historical data.
Source: Ali Charts/X
Because that wasn’t enough, the technical outlook wasn’t attractive to investors and traders either. But why was this so?
A loss of M2 correlation
Bitcoin has recently lost its correlation with the global M2 money supply. Historically, the two have moved in the same direction. Capital inflows are directly proportional to price increases, but only if there is demand for BTC.
On the charts, the M2 has been rising lately. On the contrary, the price of BTC has fallen. This disconnect could be a sign that capital is not being deployed for BTC. Instead, other risky assets like gold and silver could become more viable options.
This observation also implied that the price of the crypto could fall even further. This would mean surpassing the 50% retracement of its ATH. That would take the recovery to a retracement level of around 60%.
Source: BTC/USD vs M2 on TradingView
However, currently, the price of BTC is under intense selling pressure due to the aforementioned circumstances. That is why Bitcoin and the entire crypto market are under bearish control until capital deployment changes direction.
Final thoughts
- Garrett Bullish deposited approximately $345 million BTC into Binance – a sign of impending selling pressure.
- Bitcoin recorded the most liquidations, lowest social sentiment and decoupling from the global M2 money supply this week.