Bitcoin's surge has been dented with the recent decline in price, which saw BTC drop by 10% back below $8,000. Chepicap looks at 3 possible reasons for this BTC retracement.
- Coinbase whale manipulation
A whale recently sent 25,160 BTC to Coinbase before the massive sell-off which resulted in Bitcoin seeing a huge drop in price shortly after the whale transfer to Coinbase. It is speculated and quite possible that the $200m+ transaction was sold-off on purpose in a bid to purchase more Bitcoin lower, which is what appears to have happened. The Coinbase whale shortly after transferred funds out again, possibly making a profit of $15 million along the way by selling and buying.
The move is being considered one of the catalysts for the massive decline in price on Monday, with Bitcoin dropping over 7% on Monday, from $8,750 and finishing the day on $8,100 before Tuesday saw an additional 3.7% decline down to $7,800.
- Expected price correction
Another possible reason for the price of Bitcoin dropping could be due to a healthy correction. The idea that Bitcoin can go up forever without seeing some retracement is basically impossible. In 2019 only, Bitcoin has seen a rise of 110%, and in the last month BTC gained over 40%.
Chief executive at CoinFi, Timothy Tam called the recent move "a healthy retracement" after stating that Bitcoin was "a little bit extended". In a Bloomberg interview, Tam commented on Bitcoin volatility and market manipulation as well, saying "there’s quite a lot of volume going through, this is normal Bitcoin volatility. At the end of the day it still doesn’t take a lot of money to move these markets compared with traditional markets."
- Price movement validates correction
Commodities and crypto trader Peter Brandt believes the price movement of Bitcoin is set for a correction following the past week ending with a Doji top pattern. Brandt gave feedback regarding the doji top saying that not all exchanges featured the same candlestick, but that volatility was expected, "Most major exchanges did not have a doji top -- only Bitstamp that I can find which is not a credible exchange IMO. Remains to be seen out market will resolve short term, but some broader volatility most likely."
Most major exchanges did not have a doji top -- only Bitstamp that I can find which is not a credible exchange IMO. Remains to be seen out market will resolve short term, but some broader volatility most likely.
— Peter Brandt (@PeterLBrandt) June 4, 2019
It appears that several factors could be causing the recent price pullback which include manipulation, as well as BTC buyers exhaustion. Crypto trader TraderMayne also commented on the move, stating that the parabolic trend has been broken, and that the next resistance for Bitcoin could be $7,300
Now we've broken this parabolic trend we are starting a pullback, the question is how far will we drop?
I think we're dumping to form a HL in a bull trend, IMO the bottom is in (hot take lol)
Areas I am looking for bullishness, also good targets on shorts.
$7.3k, $6.4k, $5.6k
— Mayne (@Tradermayne) June 4, 2019
Coinbase had a long-legged Doji pic.twitter.com/8r4jM2DqiV
— Big Cheds (@BigCheds) June 4, 2019