The BTC price made a new lifetime high above $61K this past weekend following the congressional approval of a $1.9 trillion stimulus package in the U.S. Nevertheless, the flagship cryptocurrency failed to extend its uptick on Monday, as traders used the refreshed weekend peak to secure their profits.
BTCUSD dropped by over 7% in the European session to hit an intraday low of $54,568. This sudden correction prompted pseudonymous trader “Rekt Capital” to argue that bitcoin was likely seeing a volatile retest and risks shedding more gains if it fails to rebound from the $55K zone.
BTCUSD Chart By TradingView
The sell-off accelerated after whales transferred $1 billion in BTC to the U.S. exchange Gemini, a move that some traders interpreted as a sign of a significant dump ahead.
CryptoQuant flagged the large BTC deposits into the Gemini hot wallet, with the on-chain data analytics platform’s CEO noting:
“This 18k $BTC deposit is legit as it was a transaction between user deposit wallets and Gemini hot wallet. All Exchanges Inflow Mean is skyrocketed due to this deposit. Don’t overleverage if you’re in a long position.”
Shortly after the Gemini deposit news went viral on social media, bitcoin painted two red candles on its four-hour chart as panic selling ensued amid retail traders.
The BTC Futures Market Was Overheated
Besides the heavy selling pressure from whales, two other factors may have contributed to BTC prices dropping almost 10% (nearly $6K of its valuation) in the last few hours.
For one, the bitcoin futures market was highly overheated, with the overwhelming majority of the market longing or buying BTC. As per data from Bybt, $1.83 billion was liquidated in the past 24 hours. This volume is the highest since Feb. 21 of this year.
According to the Cryptoquant CEO Ki-Young Ju, another bearish sign was the massive stablecoin inflows into exchanges that sparked the weekend rally.
He explained that the Coinbase Premium Index was significantly negative when BTC broke 60K, a sign that the rally was driven by sidelined capital held in stablecoins rather than major institutional buying.
ETH Price Fails To Crack $1,900
As BTC rose to a new all- time high on Mar. 13, the ETH price failed to surpass $1,900, the final hurdle before a clear-cut break above $2K.
In today’s early sessions, the top altcoin mirrored bitcoin’s price action and dropped over 4% in its U.S. dollar pair. ETHUSD is currently hovering near the $1770 level and must hold above the $1,740 area to avert another leg down.
ETHUSD Chart By TradingView