The Bitcoin price is very volatile, like a mountain range on the charts. It may plummet 20-30% and then revert to its previous price within hours. Why is that? It usually reacts to pump and dump strategies, which you should never fall for.
A pump and dump strategy involves a whale investing millions on a currency to raise its value artificially. When ordinary traders and investors see the asset rising, they buy it, driving the price higher. As more people enter, the price rises.
When the starting whale decides the price has increased sufficiently, they sell their whole stake, dumping their overpriced coins on the FOMO buyers. Bitcoin’s wealthy whale addresses may be misleading investors! According to Santiment, Bitcoin millionaire whale addresses owning 100-10,000 BTC sold their BTC holdings between September 6 and 7.
Glassnode co-founders “Yann and Jan” also made similar observations. In the latest update, they wrote:
“A few #Bitcoin holders were shaken out over the last week, realizing losses on-chain. Stronger hands stepped in and bought the dip. As $BTC breaks above $48k, net realized PnL has returned positive, and the market is absorbing those profitable spent coins.”
Regulation For Crypto Whales?
These whales repurchased BTC when the price fell almost 15% below $45,000 due to retail profit booking. These whales bought 60K BTC in the past three days, while their price increased 5%. This is a typical example of squeezing ordinary investors.
Despite September’s volatility, veteran hands remain confident and hold. These are usually long-term Bitcoin holders. The SVAB shows bitcoin holdings at a multi-year low. It demonstrates HODL belief among veterans.
Regulators have lately targeted many crypto ventures in the industry. But, according to Forbes analyst Oliver Renick, authorities should target crypto VIPs, or whales, who have more influence in price manipulation. It would be a monumental effort for authorities to increase wallet transparency.
