Bitcoin and Ethereum holders rush to book profits before catastrophic price crash
- 1.68 million Bitcoins flow into exchanges, the most significant inflow since June 2019.
- Analysts admit to taking profits in Bitcoin and Ethereum on crypto Twitter, traders have a cautious outlook on the assets.
- Bitcoin experiences pullback ahead of $1.8 billion BTC options expiry.
Overall exchange activity of Bitcoin and Ethereum surges, analysts expect higher volatility in the two assets over the weekend.
Traders ramp up profit-taking in Bitcoin and Ethereum ahead of $1.8 billion BTC options expiry
Analysts have noted massive volatility in Bitcoin and Ethereum prices in the past 24 hours. There is a notable spike in Bitcoin exchange inflow, nearly 3700 Bitcoins hit exchanges, and net exchange flow is positive. The influx is the largest since June 2019, and analysts had anticipated a spike in volatility in response to increased Bitcoin reserves on exchanges.
This implies that traders have transferred Bitcoin to exchange wallets for profit-taking, ahead of the expiry of $1.8 billion BTC options.
#Bitcoin just made history with its largest day of exchange inflow since June 19, 2019. These days are now tied for the largest inflow day of all-time, both with 1.68M $BTC flowing to exchanges on these respective days. Expect increased volatility. https://t.co/yzOHzqlrKW pic.twitter.com/dT3JbyDD2m
— Santiment (@santimentfeed) August 27, 2021
Bitcoin in whale wallets or addresses holding 100 to 10,000 Bitcoins is back in circulation as it hits exchanges and smaller wallets are accumulating. This may emerge as an unfavorable situation that leans towards an overall bearish outlook, based on Delphi Digital's latest report titled "Tether Grows, Whales Dump, and ETH Hash Rate at ATHs."
An altcoin analyst behind the Twitter handle @AltcoinSherpa has admitted to profit-taking in Ethereum and stated that he would resume buying in December.
$ETH: This is my $ETHBTC chart and how I plan on playing these seasons. I think we still may have another few weeks of good times for #Altcoins but I'm playing it safe and taking profits around here and a bit higher. I'm selling into $BTC and will buy in Nov/Dec. #Ethereum pic.twitter.com/7hFo8VgYeJ
— Altcoin Sherpa (@AltcoinSherpa) August 27, 2021
In the case of Bitcoin, traders are anticipating a pullback. Bitcoin options are expiring on the Deribit exchange on the last Friday of the month. $1.8 worth of calls are placed to short or sell Bitcoin at $50,000.
If Bitcoin continues trading above $50,000, these traders will suffer losses when their positions are closed.
FXStreet analysts have predicted that Bitcoin is likely to form a bull trap, lure traders into long positions ahead of the crash to $40,000.
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
