Key Takeaways
- Bitcoin and Ethereum have both declined by more than 6% in the last 24 hours.
- As exchange inflows increase, on-chain analysts believe that a spike in profit-taking is under way.
- Further selling pressure could see BTC dive to $40,000 and ETH to $2,400.
A significant number of Bitcoin and Ethereum tokens have flooded exchanges in the last 24 hours. Such market behavior suggests that investors are willing to take profits, leading to a steep correction.
Bitcoin Whales Book Profits
Bitcoin and Ethereum holders are selling their assets.
Bitcoin has suffered a significant rejection from the psychological $50,000 resistance level. The flagship cryptocurrency has shed over 3,000 points in market value, representing a 6.7% decline. The sudden downward pressure correlates with a spike in profit-taking among large investors.
On-chain data and intelligence platform Santiment shows that wallet owners holding millions of dollars in BTC, colloquially known as “whales,” have been trimming their holdings. In the last 24 hours, addresses with 1,000 to 100,000 BTC have sold over 10,000 tokens, worth roughly $500 million.
The increasing BTC supply on known cryptocurrency exchange wallets alongside the spike in profit-taking from whales paints a negative picture for Bitcoin’s price action. It technically suggests that the number of tokens available to sell has surged, consequently increasing the downside potential.
Such a significant demand area may have the ability to absorb some of the recent selling pressure. But if Bitcoin can slice through this hurdle, it could drop to $40,000.
Holders who have been underwater around this price level may try to break even on their positions to prevent incurring significant losses, consequently slowing down any potential rebound.
Ethereum Loses Crucial Support
Behavior analytics platform Santiment has also recorded a significant spike in the number of ETH moved to trading platforms. In the last 24 hours alone, approximately $2 billion worth of Ethereum was transferred to Binance.
In an Aug. 25 video, on-chain analyst Dino Ibisbegovic argued that such a big increase in the number of ETH tokens held in exchanges represents a red flag for Ethereum’s future price growth. He said:
“One cannot be 100% sure that all of these tokens are going to be immediately transformed into selling pressure for Ethereum. But, it is certainly a sign that some large addresses may be looking to liquidate their positions and reduce their exposure for the time being.”
The IOMAP cohorts show that Ethereum must reclaim $3,200 as support as soon as possible to prevent 890,000 addresses from selling the 9.68 million ETH they bought around this price level. Failing to do so could lead to a sell-off that pushes prices towards the next critical demand barrier at $2,400.
