Bitcoin, the biggest cryptocurrency by market capitalization, fell from nearly $29,000 to as low as $25,234 in 24 hours before recovering marginally in early Friday trading. According to Coinglass data, more than $1 billion in positions were liquidated during the sell-off.
The amount of Bitcoin liquidation was the highest for a single day since the June 2022 market upheaval.
The Wall Street Journal reported, citing documents, that Elon Musk's SpaceX has sold off its Bitcoin assets after writing down $373 million. The journal report does not specify when SpaceX sold its Bitcoin, so this remains speculation.
This might be key reason why Bitcoin fell
On-chain analytics firm Santiment gives a likely reason for Bitcoin's drop. Santiment observes that Bitcoin whale transactions rose to their highest in over a month, and this trend started well before the big drop.
This implies that whales were very active in this drop, as Santiment noted in a tweet.
Santiment wrote in a graphic attached to its tweet that "Bitcoin whale transactions soared to a month high today, and they started before the big drop. The amount of BTC $1 million transactions began surging before and during the dump down below $26,600."
The on-chain data platform stated this in a tweet: "The dust has far from settled after crypto markets had one of its sharpest price drops of 2023. We are seeing a large amount of $1 million+ BTC transactions, indicating whales are very active on this dump. But the number of large wallets is not falling."
Santiment noted that the number of addresses holding over 10 BTC remained high despite the dump.
At the time of writing, Bitcoin remains down 7.27% in the last 24 hours to $26,431. Currently, Bitcoin traders are concentrating on the $25,000 mark, below which options positioning signals another wave of liquidations may occur.