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The Weekend Whipsaw for Bitcoin is Back

bitcoin breaks

  • Thinner trading volumes for Bitcoin over the weekend saw a surge to new all-time-high only to come crashing down on Monday against sharp profit-taking
  • Some data to suggest that a sharp selloff in older vintages of Bitcoin (some addresses dating as far back as 2013 and which had never been moved previously) responsible for the flash crash to as low as US$54,000 at one stage

It’s widely known that when trading volumes over the weekend are at their lowest, Bitcoin’s price swings tend to be the most violent.

As more institutional interest pours into the Bitcoin markets, traders who typically keep regular office hours leave the weekends pretty much like a wild west where retail traders hold court. Thinner volumes mean that relatively smaller amounts can cause massive price swings and this past weekend was no different as traders (primarily retail) chased Bitcoin up to set a new record above US$61,000.

And as often happens, that new record was promptly undermined moving into Monday as Asian traders sold down Bitcoin. It also didn’t help that over the weekend a large cache of Bitcoin was quietly spirited into cryptocurrency exchange addresses in preparation for a large sale.

Bitcoin fell by almost 10% yesterday as traders abandoned pandemic themes in both tech stocks and cryptocurrencies and bank and energy stocks saw a resurgence. That correction on Monday dragged down the stocks of companies closely linked with Bitcoin, including the likes of MicroStrategy and Riot Blockchain. Tesla suffered doubly being both a pandemic growth stock and with its investment in Bitcoin.

Debate is raging over whether Bitcoin’s seemingly relentless ascent is sustainable – the benchmark cryptocurrency has soared some 1,000% in the past year alone, fed on a heady recipe of stimulus, loose monetary policy, institutional interest and a staple diet of speculation.

The most recent correction can however probably be tied not so much to the macro narrative, but the stirring of some older Bitcoin wallet addresses that are alleged to have cashed out, with projections suggesting that as many as 18,000 Bitcoins being sold off in rapid succession on Monday.

Longer term however, Bitcoin is still very much a battle of the narrative, and it’s perhaps only timely that vintage investors in the cryptocurrency are looking to lock-in some of their dollar gains. The irony though is palpable.

For what is supposed to be a dollar replacement, Bitcoin maximalists still seem very much tied to its dollar appreciation.

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SuperCryptoNews is a global leading blockchain and crypto news provider, covering daily news on the latest tech and trading developments in crypto. We bring you expansive crypto news coverage especially in Asia, with a focus on Singapore, Thailand and Southeast Asia.

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© Copyright of Novum Global Consultancy Pte Ltd {2020, 2021}. All rights reserved.

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