Bitcoin surged to a new all-time high of $69,000 on March 5, but the celebration was short-lived as a flash crash ensued, briefly dipping below $60,000. The sudden drop was attributed to significant selling pressure from long-term holders (hodlers) and a resurgence of activity from whales and dormant accounts seeking to capitalize on profits.
During this period, CryptoQuant reported a three-day influx of Bitcoin into exchanges totaling $525 million. This movement indicated that traders were transferring their Bitcoin from cold storage to exchanges in anticipation of the all-time high (ATH) to capitalize on the price surge.
One notable event was the awakening of a dormant whale who deposited 1,000 BTC ($67.1 million) onto Coinbase at a price of $67,116. This whale had mined the Bitcoin in 2010 when the price was below $0.28, highlighting the substantial profit potential in the cryptocurrency market.
While hodlers capitalized on the price surge, leverage traders faced significant losses, with over $1 billion in leveraged positions liquidated due to the extreme price volatility, marking the largest liquidation day since the previous market cycle’s peak.
Despite the recent market activity, not all Bitcoin holders are eager to sell. CryptoQuant data indicates that 45% of Bitcoin has remained dormant for over three years, with an additional 11% untouched for five to seven years.
Crypto analysts view the recent flash crash as a healthy market correction, noting that it helped reduce high volatility and reset high funding rates, which represent the difference between futures and spot markets. Elevated funding rates typically signal over-optimism in the market, particularly among long traders.
Bitcoin has since recovered to above $66,000 within 24 hours, representing a minor 4% decrease from its all-time high, highlighting the resilience and volatility inherent in the cryptocurrency market.
