The Reason Why Bitcoin Plunged? 25,000 BTC ($215 Million) Transferred to Coinbase Shortly Before
Following one of its best months in years, Bitcoin realized a steep correction which drove the price down below $8,000. As it’s almost always the case with sharp and notable BTC price movements, concerns of price manipulation didn’t take long to emerge.
Bitcoin Price Drops Down to Below $8,000
Bitcoin was trading in the range around $8,500 for a few days. However, it didn’t take a lot for the cryptocurrency to undergo a notable correction.
As seen in the above chart, the price dropped suddenly within about an hour. The decline managed to wipe of about $13 billion off Bitcoin’s total market cap. Naturally, as it’s almost always the case, the entire market followed. All of the major altcoins are also trading in the red, as the market saw more than $25 billion taken out of its capitalization.
The fact that Bitcoin Dominance, the index which measures its relative share in the total market, remained somewhat unchanged, shows us that altcoins were unable to capitalize on the drop and also lost positions. BTC dominance currently sits at around 55.8 percent.
Fears of Bitcoin Price Manipulation Double Down
Shortly before the sudden drop in Bitcoin’s price, a significant amount of BTC was moved to Coinbase’s exchange wallet from an unknown wallet. The transaction can be seen here. The total amount of 25,160 BTC, at the time of the drop, was worth around $215 million.
Obviously, for anyone following the crypto space, it’s not the first time fears of price manipulation are emerging following a sharp movement. Back in April, when Bitcoin surged with more than $1,000 within a day, Reuters reported that the leg up has been caused by nothing but a single algorithmic order of around 20,000 BTC executed among various exchanges.
There has been a single order that has been algorithmically-managed across these three venues, of around 20,000 BTC. […] If you look at the volumes on each of those three exchanges – there were in-concert, synchronized, units of volume of around 7,000 BTC in an hour.
A Healthy Correction Nevertheless?
Irrespective of the fears mentioned above, some still hold that the latest drop was a somewhat needed correction which doesn’t necessarily mean that Bitcoin’s uptrend is cracked.
According to veteran trader and popular commentator Peter Brandt, the correction followed a so-called “Doji top.”
Doji top on weekly chart begins correction. $BTC pic.twitter.com/9L9YCZbrP8
— Peter Brandt (@PeterLBrandt) June 4, 2019
What he refers to is a common trading term used to describe the formation of a transitional candlestick which indicates the indecision between bulls and bears. The Doji can also be viewed as a continuation pattern where after the open, bulls tend to push the prices higher only for it to be rejected and pushed lower by the bears. However, if that’s the case, bears won’t be able to keep the prices lower and the bulls tend to push them back higher. If Bitcoin manages to climb back up to the range around $8,500, this would be a confirmation of its formation.
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