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Large Holder Sell-Offs Increase the Risk of a Bitcoin Collapse
Bitcoin is closing its fifth consecutive month in the red. At the same time, the asset has not yet shown signs of forming strong support. On-chain data also indicate persistent selling pressure. As a result, the market risks facing another wave of decline.
Such a scenario will unfold if current demand fails to absorb the growing supply. Therefore, traders should closely monitor key macroeconomic signals.
Share of Transfers to Exchanges Hits a New High
The inflow metric measures the ratio of the ten largest transactions to the total volume of deposits. A higher reading typically signals that large holders are looking to lock in profits. The recent drop below $70,000 coincided with a local record in this indicator. Its seven-day moving average reached its highest level in the past two years.
An analyst from CryptoQuant, known under the pseudonym Darkfost, noted the unusual nature of the situation. The expert highlighted the attractiveness of deep liquidity on Binance. However, the uncertain market environment is also prompting investors to reassess their trading strategies.
Whale Inflow Ratio (Bitcoin). Source: CryptoQuant
Particular interest surrounds the root cause of this surge in activity. A significant portion of deposits is linked to a wallet belonging to former head of crypto exchange Bitforex, Garrett Jin. The Chinese entrepreneur drew community attention after a successful short position last autumn.
According to the latest data, since early February the balance of the mentioned address has decreased by 10,000 Bitcoin. Moreover, the investor has sold more than 67,000 coins since last August, when the leading cryptocurrency was trading above $110,000.
Bitcoin wallet balance dynamics of Garrett Jin. Source: Arkham
Representatives of the analytics service Lookonchain recorded a recent transfer of 5,000 coins to Binance, followed by their sale.
The key question remains the future strategy of this market participant. There are also concerns about whether other large investors may follow his example.
Digital Asset Market Faces Record Volatility Surge
During a strong uptrend, selling activity is easily absorbed by new demand. Under such conditions, coins move to buyers without sharp price declines. However, amid negative sentiment, a massive inflow of capital to exchanges increases the likelihood of sell-offs.
The situation is further complicated by the asset’s historical volatility reaching its highest level in a year. This indicator measures the amplitude of price fluctuations over a specific past period. Elevated readings therefore signal the risk of strong short-term price swings.
Bitcoin Historical Volatility. Source: Coinglass
Although this metric does not predict trend direction, it creates conditions for bearish pressure. An acceleration in selling could push the price down to the $55,600 area. Such movement would fully align with a bearish flag technical pattern. Conversely, to stabilize the situation, buyers need to regain control above the $70,800 level.
See also: "Bitcoin Price Today: Falls Below $68K as Altcoins Lag"
