Who Sold Bitcoin (BTC)? By U.Today

A recent sell-off in the cryptocurrency market resulted in more than $1.28 billion worth of assets being sold during a short-lived spike of selling pressure, despite an overall stable market performance. This surprising turn of events particularly impacted open interest on platforms such as Binance, which saw a significant decrease.

When Bitcoin’s price reached $64,800, a growing number of long positions entered the market, escalating the situation. Data indicates that many traders were overly optimistic as Bitcoin approached this price point, expecting it to breakout to even higher levels, which led to a considerable inflow of long positions.

However, when Bitcoin failed to maintain its upward momentum, that optimism turned into fear. The resulting sell-off wiped out about 4,000 BTC in open interest on Binance futures, contributing to a more bearish market atmosphere. The sharp decline in open interest is significant as it highlights the unwinding of leveraged positions.

A large number of leveraged long positions can create a volatile market condition, where even a slight price drop can trigger a cascade of liquidations. As a result, Bitcoin’s price experienced a rapid and steep decline due to the liquidation wave triggered by the drop in value.

The $1.28 billion sell-off and the corresponding fall in open interest raise important questions about the identities of the sellers. Large institutional investors, commonly referred to as whales, may be cashing in on profits at key resistance levels like $64,800. These major players often sell into market strength, recognizing that a significant portion of traders are overleveraged, allowing them to sell at favorable prices.