Bitcoin’s drop below $33,000 for the first time in over a week on January 21, 2021, as selling pressure accumulated to push the price action significantly lower.
Data acquired from TradingView showed BTC/USD continued its downtrend, losing 7% on the day and failing to bounce from the $33,000 support. A look at Coinbase Pro’s bitcoin price premium indicates that selling is happening currently.
This latest move pushes bitcoin down over 14% compared to its highs from January 19. It came amid increased selling at Coinbase Pro which is the professional trading arm of the US-based crypto exchange.
Based on previous reports, huge spikes in volume at Coinbase Pro have accompanied some price volatility in the recent weeks. This time around, it was a drop in the so-called ‘Coinbase Premium’ which indicated that selling would happen soon. The growing difference in price between bitcoin on the platform and others decreased abruptly.
The CEO of on-chain analytics resource CryptoQuant, Ki Young Ju, summarized on Twitter with a chart:
“It seems $BTC sellers came from #Coinbase. Coinbase Premium Index has been a negative value since an hour ago.”
Analysts and experts think that Coinbase whales may want bitcoin to drop further for consolidation purposes. On the previous day, Ki had talked about a corresponding increase in deposits across crypto exchanges from whales.
That comment indicated some desire to trade or sell bitcoin at prices around or lower than the mid-range of its trading corridor that has formed between $30,000 and $40,000.
The Battle Of The BTC Whales
Another trend that developed since bitcoin started rising towards its new all-time highs was a transfer of wealth from the small investors to the whales. The whales were buying the supply in every price dip.
Despite these sell-offs, the buyers are still hitting headlines lead by the investment giant Grayscale that fixed its biggest-ever one-day BTC purchase that was worth over $600 million. In the 24 hours to the end of January 20, the firm increased its balance by an extra 8,000 BTC, which is far more than the supply that is being added to the market by miners.
At a virtual conference earlier this week, CEO Michael Sonnenshein said that increased interest from financial advisers and nation-state adoption of digital assets are two of the major trends that might dominate 2021.