On 21st Feb, a huge transfer was made on a BTC exchange wallet, and it indicated a price correction amidst low risk-taking investors.
A company or a group of companies credited around 28K Bitcoins, which are worth about $1.5 billion, to OKEx, which has a countertop service. These Bitcoins were further sent to various other wallets, and one of these wallets belonged to an entity that was involved in many illegal activities such as money laundering in Asia and various scams.
Reporters say that such large transfers of cryptocurrencies could send liquidity shocks around the investor markets because investors usually transfer huge sums of BTC into public accounts, so it becomes easy for them to liquidate them for cash or exchange them against crypto tokens. On the flip side, it could also mean that they want to hold the Bitcoins for the future.
Statistical data shows that the reserves of all the exchanges had huge drops since the start of March last year, and it dropped by 635,000, just below 3 million. This drop happened alongside the rise of the prices of Bitcoin. The exchange rates of Bitcoin increased by almost 1200% during this time period.
Is It Just A Short Term Panic Spree?
This might be a short term shock, and the market sustains Bitcoin’s selling pressure because it has grown out to become a trustworthy and secure asset for many investors, and new ones are constantly adding it to their portfolios.
A crypto economist, Ben Lilly, wrote a paper in which he explained the liquidity crises which is surrounding the market of Bitcoin. According to him, the institutions, investment firms with cryptocurrency enabled and decentralized finance, are the entities that have been deliberately manipulating the supply of Bitcoin at exchanges.
Bitcoin, technically is predicted to stay on the upward trend and increase in price as all the financial indicators and moving averages, including 20 days, 50 days and 4 hours, are showing a positive result for this cryptocurrency, but no one knows what is in the future with absolute certainty. That is why more and more investors are holding Bitcoin because it looks like it will be very profitable in the future.