After stopping short of reaching its all-time high (ATH), the Bitcoin price saw a sudden $1,000 drop.
The price action coincides with major crypto exchange OKEx resuming withdrawals after a one-month imbroglio. Reports also show significant BTC inflows to exchanges which might signal an imminent price correction.
The Bitcoin price is currently hovering below $17,900 following a dramatic 11% slide that saw BTC lose over $1,000 in a little under three hours. Before the dip, BTC was attempting to surmount its ATH by possibly climbing above the $20,000 for the first time.
Several factors appear to have contributed to the Nov. 26 dip with data from on-chain analytics provider CryptoQuant showing a significant BTC inflow to exchanges. Such a scenario often points to traders positioning their coins for sale to cash-in on local tops amid Bitcoin’s bullish rise.
Thursday’s dip might also signify temporary bull fatigue after successive rejections above the $19,500 price level. Commenting on the sudden drop, Vinny Lingham, CEO of crypto wallet provider CivicKey tweeted:
This sell-off was expected. Shouldn’t drop below $16,000 and so you can expect some healthy sideways trading for the coming weeks. $20k requires a lot of consolidation to get enough momentum to maintain a break above.
Meanwhile, OKEx is set to resume crypto withdrawals by 8 AM (UTC). The crypto exchange reportedly holds about $3.48 billion worth of Bitcoin that has been stuck on the platform since mid-October.
The $1,000 Bitcoin price slide also caught out some unaware futures traders. According to data from crypto derivatives aggregator Datamish, the drop triggered a liquidation of over $81 million in BTC longs on BitMEX.
Despite the drop, BTC proponents say the bull case is still strong. Indeed, the 2017 bullish advance did see a few 30% corrections as the Bitcoin price almost crossed the $20,000 price mark. BTC is still up 147% since the start of 2020.
