Bitcoin Falls Below $86K as $2.78B in Whale Sales Outpace Retail Buyers

Bitcoin's recent drop below $86K is attributed to significant selling pressure from large holders, known as whales, who sold $2.78 billion worth of BTC. Meanwhile, retail and mid-sized Bitcoin wallets accumulated a total of $474 million in purchases, illustrating a stark contrast in market participation. The ongoing selling from short-term holders indicates potential capitulation, but confirmations of a trend reversal are still pending. Analysts suggest that Bitcoin may retest its quarterly low of $80,600 if the downward momentum continues.

Key Takeaways

Retail and mid-sized Bitcoin wallets accumulated $474 million in buying volume, while whales offloaded $2.78 billion during the same timeframe.
There is a noticeable trend of short-term BTC holders selling at a loss, signaling capitulation; however, a recovery has yet to be confirmed.
Bitcoin may drop back to quarterly lows around $80,600 after moving away from short-term bullish trends.

Whales Drive the Sell-Side as Retail Traders Bet on a Rebound

Data from Hyblock Capital reveals a clear difference in behavior between various participant categories. Retail traders (holding $0-$10,000 worth of Bitcoin) have shown resilience, accumulating a total of $169 million as they buy into the downtrend. Mid-sized traders (holding $1,000-$100,000) added a net position of $305 million, anticipating a market recovery.

Cryptocurrencies, Bitcoin Price, Markets, Cryptocurrency Exchange, Price Analysis, Market Analysis, Liquidity, Whale BTC price and volume delta (cumulative) between different wallet sizes. Source: Hyblock

Conversely, whale wallets (holding $100,000 to $10 million) continue to dominate with a cumulative selling volume of $2.78 billion. This mismatch in buying power means that while smaller investors view sub-$100,000 prices as attractive, larger holders use these same prices to lessen their market exposure.

In addition, on-chain analyst Axel Adler Jr. noted that the short-term holder spent output profit ratio (7-day SMA) has dipped below 1, currently at approximately 0.99. This suggests that coins held for less than 155 days are being sold at a loss, a condition often associated with capitulation events. Despite the stress seen in the market, Adler pointed out that this does not inherently signal a reversal; a sustained recovery would need the SOPR to reclaim and hold above 1, demonstrating that demand is successfully absorbing supply.

Cryptocurrencies, Bitcoin Price, Markets, Cryptocurrency Exchange, Price Analysis, Market Analysis, Liquidity, Whale Bitcoin short-term holder SOPR. Source: Axel Adler Jr.

Related: Bitcoin Experiences 'Pure Manipulation' Amid U.S. Sell-Off Liquidating $200M in an Hour

Bitcoin Set to Explore Lower Liquidity Levels

Technically speaking, Bitcoin's market structure has weakened. The price has broken from a rising wedge formation, crossing below the monthly volume-weighted average price (VWAP) and forming a bearish break of structure (BOS) beneath $87,600.

Cryptocurrencies, Bitcoin Price, Markets, Cryptocurrency Exchange, Price Analysis, Market Analysis, Liquidity, Whale Bitcoin four-hour chart analysis. Source: Cointelegraph/TradingView

With the short-term bullish trend invalidated, Bitcoin now has downside targets aligned with previous liquidity pools or external liquidity. Immediate targets are set at the $83,800 swing low, and if selling pressure endures, a retracement towards the quarterly lows of $80,600 could occur. At this stage, analysis of order flow and on-chain signals indicate that it may be prudent to remain patient before declaring a believable bottom in the market.

Related: Breakdown of Bitcoin Parabola Increases Potential for 80% Correction, According to Veteran Trader