You know how it is when there is an announcement about a war. People do not wait to see if the information is true; they panic first. Those who have money in the bank rush to withdraw their money, and others start to stock up on food at home because they do not know what is coming next.
The same thing is what we just experienced in the Bitcoin market.
A huge amount of Bitcoin was dumped in the market by large holders in a very short period of time. Binance had an outflow of approximately 40,467 BTC. Then came Coinbase with an outflow of approximately 15,630 BTC, followed by Wintermute with an outflow of approximately 12,697 BTC. A Trump insider wallet also dumped approximately 15,189 BTC. OKX had an outflow of close to 7,966 BTC, and Kraken had an outflow of approximately 5,548 BTC. When all these figures are added together, the amount of Bitcoin that entered the market simultaneously is huge and cannot come from regular traders.
These are institutions, market makers, and wallets that have sufficient power to shift the market. When Bitcoin begins to flow from cold storage to exchanges in such massive amounts, it is usually an indication that a sale is about to occur. When traders realized what was happening, panic selling was bound to follow. People began to sell, stop losses were triggered, and the price plummeted faster than most people could handle.
The timing of this dump is not coincidental. The rising tensions between the US government and Iran have instilled fear in the markets around the world. Whether a war actually breaks out or not is of little consequence at times like these. Markets are driven by uncertainty, not certainty. When headlines begin to sound like a battle cry, investors begin to distance themselves from volatile markets, and crypto is usually the first to take a hit.
Bitcoin is often referred to as digital gold, but the truth is that when fear is the dominant factor in the market, even gold gets dumped. Smart money likes liquidity during times of uncertainty. They head for cash and wait for things to clear up. That is exactly what is happening in this Bitcoin dump.
But for retail investors, this is an emotionally draining experience. Seeing their investments lose value while social media is filled with FUD is not an easy situation to be in. While some may choose to sell and cut their losses, others may hold on to their investments in hopes that the market recovers quickly. This is an experience that has been repeated time and time again in the crypto market.
We have witnessed similar situations in the past. Geopolitical issues, regulatory threats, and macroeconomic issues have all been responsible for large price dumps in Bitcoin. However, each time this has happened in the past, the market has responded dramatically to the news. However, over time, the market has stabilized. This is a redistribution phase where Bitcoin is transferred from weak hands to stronger hands.
To me, this dump is like everyone running to the bank when they hear gunshots in the distance. Not necessarily because the war has started, but rather because everyone wants to be safe rather than sorry. Fear is not always a guarantee of danger, but it is a guarantee of action.
Of course, this is just my opinion and not financial advice. The market will continue to do what it does best: go through cycles of fear and greed. However, as is always the case with crypto, panic is not something that tends to favor anyone who acts on it, whereas patience tends to have a different tale to tell later on.
