The world’s largest cryptocurrency fell sharply on Tuesday, abruptly reversing recent gains and falling back below the key $60,000 level. Broader crypto prices also tumbled in tandem with Bitcoin.
Bitcoin fell 5.8% to $59,481.0 by 01:40 ET (05:40 GMT).
Whale Alert, an X profile that tracks large crypto transactions using on-chain data, said about 30,000 Bitcoin tokens, worth $1.88 billion at current rates, were transferred from a cold wallet to crypto exchange Binance on Tuesday.
Later reports said that the transaction was an internal transfer between Binance’s wallets. But the transfer still rattled traders with the prospect of a sale event, given that it showed a large amount of Bitcoin being moved onto an exchange.
Mobilizations of tokens onto exchanges usually herald a sale, although it remained unclear if such a scenario would occur.
But news of the transfer added to selling pressure on Bitcoin, which was already retreating after a weekend rebound petered out.
A report from blockchain research firm Glassnode showed that net capital inflows into Bitcoin had “markedly cooled” in recent months, likely driving the token’s rangebound performance between $50,000 and $60,000.
The report suggested that investor optimism over the launch of spot Bitcoin exchange-traded funds had cooled entirely, and that a degree of equilibrium had been reached between investors holding profitable and loss-making positions on the token.
But the report also noted that speculative activity around Bitcoin had fallen sharply in recent months, leaving spot market action as the key driver of prices in the near-term.
Glassnode warned that periods of calmer speculation and market action preceded a “an expectation for heightened volatility,” which could herald wilder swings in Bitcoin’s price over the coming weeks.
Bitcoin has remained within a tight trading range after hitting a record high in March, as trading volumes in the token steadily fell amid waning retail interest.
Broader crypto prices tracked declines in Bitcoin, amid a dearth of positive cues for the sector.
World no.2 crypto Ether fell 8.6% to $2,464.30, while XRP, SOL and ADA sank between 4% and 5%.
MATIC shed 10.4%, while among meme tokens, DOGE lost 6.7%.
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