A high-volume transfer to a Bitcoin exchange wallet that was carried out on February 21st raised calls for a wider price correction among risk-averse traders.
One entity (or group of entities) has transferred approximately 28,000 BTC worth over $ 1.5 billion to an address that is said to be part of the OKEx exchange services. A Twitter user comments that the OTC address continued to credit BTC to multiple wallets, one of which supposedly belongs to a „rich“ address that has shown links to multiple cloud mining scams and money laundering activities in Asia.
Analysts see larger exchanges crypto transfers and related services as a sign of impending selling pressure. A trader is most likely to deposit Immediate Bitcoin into public wallets if they intend to sell them for cash or exchange them for other cryptocurrency tokens.
Conversely, larger withdrawals indicate the intention not to sell / exchange the bitcoins, but to hold them.
Recently, data from the exchanges has shown a massive drop in BTC reserves, which have fallen by about 635,000 since peaking in March 2020 – the equivalent of just under 3 million. They largely coincided with a dramatic spike in the BTC / USD exchange rate, which has soared around 1,200 percent over the same period.
The OKEx deposit, as mentioned above, appeared at a time when Bitcoin was showing signs of a peak. On Sunday, the cryptocurrency hit a new price milestone above $ 58,000, leaving Twitter users concerned about an impending sell-off:
„This coin flow tells us that they have ammunition now to increase sales pressure in the future.“
A short term shock?
It is also possible that the market will end up absorbing the selling pressure, while Bitcoin arrives as a safe haven asset with mainstream investors.
Ben Lilly, a cryptocurrency economist, has penned a paper that focuses on an ongoing liquidity crisis in the Bitcoin market. He notes that three sectors are massively buying bitcoin : crypto-enabled investment firms, corporations / institutions, and decentralized finance.