Bitcoin Price Dropped To $8,900: Here's What Happened

Bitcoin opened higher on June 15, but revisited $8,900 for the first time since May 27.

Opening the day at $9,331, it was clear the bulls were struggling to push upwards. When $9,300 broke, it was a massive freefall to $8,900. The price bounced back, recovered to $9,000 and once again traded sideways in the $9,400 range.

The freefall brought about massive liquidation worth around $22 million to long sellers on BitMex. Meanwhile, around $11.8 million were liquidated from short-sellers, possibly during the bounce.

According to Cointelegraph, the market data revealed "crypto whales" to be responsible for the sell-off. When these whales -- individual investors who hold a large number of Bitcoins -- began closing their positions, retail investors panic sold theirs as well.

Because whales hold an immense amount of Bitcoin, they have the power to control the direction of the crypto markets. In theory, this is simply not possible with stock markets, which has extensive regulations in place to prevent market manipulation. In the crypto markets, those regulations do not exist. For the whales, profitability is everything, and seeing the price failing to break $10,500 for a long time is a signal to take profits now.

After the massive rally since the March price crash, the whales might be taking profits to protect their holdings.

Whale activity on Gemini Exchange may have triggered the sell-off. According to CryptoQuant CEO Ki Young Ju, the Bitcoin reserves of the Winklevoss Twins-owned exchange is indicating Bitcoin had just entered the bear market.

While the sell-off is triggered by whales closing their positions, this might just be a short-term behavior and the long-term outlook is still bullish. In a separate report, the number of Bitcoin whales has increased since January 2020. Normally, a single Bitcoin whale holds around 1,000 BTC.

Additionally, the number of Bitcoin whales is approaching levels similar to September 2017, three months before the massive bull run that led to Bitcoin reaching almost $20,000 in December 2017. A Glassnode report, accessed by Cointelegraph revealed there are currently 1,882 of these whales who are not moving their coins.

Bitcoin has since recovered from the previous day’s $8,900 lows. A move beyond $9,600 will signal a push to $9,750. Indicators are continuing to a point to a sideways trend in the $9,000-$9,900 range in the coming days.