Key Points
- Bitcoin’s price dropped 8% on March 15, but market data suggests whale investors may prompt an early BTC rebound.
- Despite the dip, institutional investors continue to rapidly purchase Bitcoin, indicating a potential price rebound above $80,000.
Bitcoin experienced an 8% drop in price on March 15, falling from a high of $73,805 to a weekly low of $66,786. This decline was largely attributed to overzealous bull trading.
The cryptocurrency lost more than $120 billion of its market capitalization on that day. However, institutional demand for Bitcoin remained steady, raising questions about the potential for an early price rebound above $80,000.
Reasons for Bitcoin’s Price Dip
The price dip was triggered by excessive bull trading over the past 60 days, which followed the approval of Bitcoin ETFs. This period saw a significant 75% rally in Bitcoin’s price, culminating in an all-time high of $73,805 on March 15.
During this time, bullish traders took on highly-leveraged positions to maximize gains. Bitcoin funding rates, the fees paid by leveraged long traders to short position holders, averaged 0.05% since the start of March.
The elevated funding rates over a prolonged period led to the overheating of BTC futures markets. This exposed bull traders to margin calls and massive liquidations, resulting in an 8% price drop on March 15.
Bitcoin Whales Buying the Dip
Despite the price dip, institutional investors continue to rapidly buy Bitcoin. According to data from Santiment, the cumulative balances in whale wallets holding at least 10 BTC ($700,000) have increased.
At the start of March 2024, Bitcoin whales held a total of 16.08 million BTC. By March 15, that figure had increased to 16.12 million BTC, indicating the acquisition of 40,000 BTC, worth approximately $27 billion.
This data reveals three key facts. First, the whales acquired 40,000 BTC in the first half of March 2024, matching the total accumulation in February and January. Second, they now control more than 83% of the total Bitcoin supply in circulation. And third, despite the 8% price drop on March 15, the whales maintained their bullish positions.
If institutional investors continue this buying trend, retail investors and speculative swing traders may follow suit, potentially leading to an early price rebound.
Bitcoin Price Prediction
With Bitcoin’s recent retreat from the $74,000 area, the next rally could potentially push the price closer to $80,000. Current market data indicates strong demand for Bitcoin, suggesting a fair chance for an early price rebound.
However, in the short term, it is crucial for the bulls to avoid a downswing below the $65,000 area. Data from IntoTheBlock shows that 576,320 addresses acquired 366,780 BTC at an average price of $65,758. Losing the key $65,000 support level could trigger another wave of margin calls and cascading liquidations.
