Summary

  • Bitcoin’s plunge was caused by cascading selling amid thin weekend liquidity, not by large Bitcoin inflows to exchanges.
  • The decline was likely led not by early investors but by selling pressure from short-term holders who sold at a loss.
  • He stressed that traders should watch for potentially negative news centered on the U.S., citing the direct sale of a substantial amount of Bitcoin on the spot market rather than through over-the-counter (OTC) transactions.

Forecast Trend Report by Period

Bitcoin’s sharp drop stemmed from cascading selling amid thin weekend liquidity, rather than from a large influx of coins to exchanges, according to an analyst.

On November 15, analyst Firex wrote on X, formerly Twitter, that no unusual movement had been detected in recent Bitcoin flows into exchanges. Inflows during the sharp morning selloff were in line with a typical weekend, he wrote.

Over the past two weeks, net Bitcoin inflows to exchanges were only slightly above normal levels. That suggests the decline was caused by concentrated selling in a low-liquidity market rather than by large-scale selling.

Firex identified short-term investors as the most likely sellers. He ruled out the possibility of heavy selling by early investors, saying short-term holders who sold at a loss were more likely to have driven the drop.

He also cautioned against dismissing the possibility of insider trading. The fact that a substantial amount of Bitcoin was sold directly on the spot market rather than through over-the-counter, or OTC, transactions raises questions, he wrote. He added that traders should watch for news, particularly from the U.S., that could negatively affect the market.

Uk Jin