By Yasin Ebrahim
Investing.com – The selloff in Bitcoin steadied Monday amid a heated debate in the cryptosphere on whether a large holder, or whale, was preparing to dump more than a billion dollars worth of bitcoin, pushing down the price.
BTC/USD fell 5.6% to $56,383 after hitting a high of $61,468 on Sunday.
The latest selloff comes as a large initial crypto transfer of about 18,961 BTC bitcoin was spotted making a move on the blockchain to an address that some speculate belongs to a wallet on crypto exchange Gemini.
Large sums of BTC sloshing around the blockchain is not new, but history suggests that a large sudden inflow onto the Gemini exchange usually leads to a sea of red.
The bitcoin whale index, represented by the number of bitcoin addresses with at least 1,000 bitcoins, has been climbing and is approaching prior-record highs, once again.
On-chain analytics from the research and analysis firm Glassnode showed that addresses with at least 1,000 bitcoins hit 2,164 clusters last week, shy of a record 2,814 clusters achieved in September 2019.
Still, there are some who disagree the 19,000 BTC transaction is a sign that "whale dumping" is imminent. On-chain analyst, who uses the handle Willy Woo, pointed to data suggesting the nearly 19,000 BTC inflows were "fake," as traders using leveraged scrambled amid the sell-off.
Despite the debate over whether the transaction was an internal flow on the Gemini exchange or an external flow into the exchange, the latest selloff served as a reminder that wild-swinging assets and leverage don't mix well, when a trade goes awry.