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After a series of negative developments such as Tesla’s decision to stop accepting Bitcoin payments and China’s crypto warning, BTC continued to plunge going to just above $30,000 at one point. While the sudden price drop has triggered panic selling among short-term investors, market data revealed that whales took it as an opportunity to accumulate more coins.
China’s crypto warning pushed BTC below the $43,000 support and sent it diving to as low as $30,001.51, according to CNBC. However, Bitcoin was able to bounce back higher and traded at 36,955.50 at the time of writing.
Ether, the native crypto of the Ethereum platform, and Dogecoin were not spared in the market downturn. ETH plunged briefly to as low as $1,900 while DOGE slid as low as $0.236, according to Cointelegraph.
Both cryptos were able to recover slightly as well. At the time of writing, Ether traded at $2,367.71 while Dogecoin traded at $0.320383.
The sudden downturn especially hit crypto traders using excessive leverage as BTC suddenly dropped by around $8,000. Market data revealed that 10,525 Bitcoins were liquidated in one hour at the height of the crash.
While derivatives and leveraged traders suffered, whales used the market downturn to buy the dip. Market data revealed an outflow of 16,895 BTC in just 10 minutes on May 19 as whales put their newly purchased crypto into their personal wallets.
This trend of whales buying the dip as short-term crypto investors panic-sold their holdings was earlier observed by blockchain data analytics firm Glassnode. “There are strong signals that short-term holders are leading with panic selling, however, long-term holders are stepping in to buy the dip and their confidence is largely unshaken,” the company wrote in a note on Monday.
Meanwhile, MicroStrategy also took advantage of the correction and added another 229 BTC to its stash. “On May 18, 2021, MicroStrategy Incorporated (the “Company”) announced that it had purchased approximately 229 bitcoins for $10.0 million in cash, at an average price of approximately $43,663 per bitcoin, inclusive of fees and expenses,” the company announced on its SEC filing
The business intelligence firm now holds more than 92,000 BTCs with its recent acquisition. “As of May 18, 2021, the Company holds approximately 92,079 bitcoins that were acquired at an aggregate purchase price of $2.251 billion and an average purchase price of approximately $24,450 per bitcoin, inclusive of fees and expenses,” the company revealed.
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