Money from whale investors reverses course, Bitcoin plunges following the 2021 scenario

Bitcoin is currently trading around $90.61K after a week of volatile movements. Market data shows a concerning signal: shark wallets and shark wallet counts are decreasing, while fund flows from ETFs are also turning negative. The combination of these factors is painting a similar picture to the 2021 cycle, when prices experienced significant volatility.

Accelerating Capital Outflows from Bitcoin ETFs

Last week, Bitcoin ETFs in the US experienced substantial outflows. After losing $497 million last week, the trend continued with a total withdrawal of $188 million. Data from Farside Investors shows that BlackRock iShares Bitcoin Trust (IBIT) recorded the largest outflow with $157.3 million, equivalent to 1,792 Bitcoins transferred out of the fund. This reflects investor sentiment turning more cautious.

On-chain Data Reflects Whale Strategy Changes

Blockchain analysis from Santiment reveals a shift in holding structures. The number of Bitcoin addresses holding at least one coin has decreased by 2.2% since the peak in March. However, a positive sign is that large wallets holding more than one Bitcoin have increased their total holdings by approximately 136,670 BTC during the same period. This indicates a reallocation of large investors’ portfolios.

2021 Technical Pattern Repeating: Double Top and Collapse

Crypto analyst Tracer pointed out a concerning price structure. Bitcoin is replicating a pattern from the previous cycle with two peaks, followed by a deep sell-off. According to the analysis, the price may temporarily recover to $100K, but if the scenario repeats entirely, BTC could drop below $60K. Tracer warns that many investors are not prepared for this scenario.

Negative Correlation with Tech Stock Markets

Unlike its role as a “safe haven” in previous cycles, Bitcoin is not rising alongside tech stocks, nor is it increasing when precious metals like gold and silver rise. This indicates a loss of Bitcoin’s ability to act as an “asset protector” in the current market environment.

Currently, market sentiment is shifting towards caution. Capital outflows from ETFs combined with on-chain data showing decreasing whale and shark wallet holdings suggest that large investors are preparing for further volatility. Bitcoin at this point needs a strong positive catalyst to change the current sentiment.