Bitcoin Whale Exits $350M Leveraged Position as BTC Struggles Near $90K

Summary: A significant Bitcoin whale has closed a large leveraged position as the price of BTC declines towards the $90,000 mark. This decision comes amidst a general downturn in the crypto market and mounting selling pressure from various factors.

Key Takeaways

A Bitcoin whale exited a leveraged position of 3,846 BTC, losing over $3.5 million in the process.
The broader cryptocurrency market experienced a 2% drop, leading to a fall in total market capitalization.
Institutional investors are withdrawing from Bitcoin and Ethereum ETFs, further impacting market sentiment.
Mining companies, like Riot Platforms, are selling significant amounts of BTC, adding to the market's downward pressure.

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Whale Closes Large Leveraged Position

A prominent Bitcoin whale has recently liquidated a significant leveraged position as the price of BTC declined towards the critical $90,000 threshold. Blockchain analytics firm Lookonchain reports that this particular whale wallet, known as 0xFB78, unloaded all its Bitcoin long positions, totaling 3,846 BTC, equivalent to approximately $350.4 million. This move resulted in a loss exceeding $3.5 million.

This liquidation coincided with a sharp drop in Bitcoin's price during the trading day, highlighting the heightened risks of short-term leverage in the current market.

Risky Positions Result in Liquidation

Prior to the sell-off, data from Lookonchain indicated that the whale's wallet had about 2,830 BTC in long positions valued at around $259.55 million. The trader subsequently increased their investment by adding $20 million in USDC to amplify their position through Hyperliquid. However, despite the additional funds, the unrealized losses had already surpassed $2 million, putting the position at significant risk. Consequently, the entire position was closed amidst the price decline.

Market Weakness Influences Whale Behavior

The whale's sell-off occurred against a backdrop of overall market weakness. On Thursday, the total global cryptocurrency market witnessed a 2% decline as traders took profits from recent gains. The total market capitalization fell from $3.27 trillion on Wednesday to nearly $3.2 trillion in just one day.

Major cryptocurrencies demonstrated similar trends in price action, with Bitcoin trading near $90,077, down 2.8% in the past 24 hours. Ethereum also fell by about 3.7%, dipping below the $3,200 support level. Other large-cap tokens like XRP, BNB, Solana, and Cardano recorded losses between 2% to 5%.

This pullback follows an impressive rally earlier in the month when the crypto market gained over 8% from January 1 to January 7. During this period, Bitcoin surged by 8.5% and briefly reached $94,400 on January 6. This momentum extended to altcoins, with Dogecoin (DOGE), Pump.fun (PUMP), and Shiba Inu (SHIB) all posting significant gains. Nonetheless, Bitcoin has struggled to maintain these higher levels, facing repeated challenges to break past the $94,500 resistance, a level that also limited gains in December.

Institutional Withdrawals Impacting Market Sentiment

The outflow of institutional capital is adding further pressure to market conditions. Data from SoSoValue reveals that spot Bitcoin ETFs saw nearly $730 million in net outflows over the past two days. Additionally, Ethereum ETFs faced a reversal, reporting $98.45 million in net outflows on Wednesday, ending a three-day inflow trend. Solana ETFs experienced a similar fate, with $40.8 million in outflows after six consecutive days of inflows.

This shift in market sentiment is echoed in the Crypto Fear and Greed Index, which dropped six points in a 24-hour period, retreating from a multi-week high of 49 back into neutral territory.

Mining Sales Contribute to Market Decline

Added pressure is also coming from the mining sector. Riot Platforms, a U.S.-based mining company, reportedly sold over 1,800 BTC, valued at roughly $161.6 million, to meet operational necessities. Such substantial sales can lead to increased volatility, especially during times of lower liquidity and greater uncertainty in the market.

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