Bitcoin Whales 40x Leverage Short Moves from $2M Loss to $6M Gain
Key Takeaways
- A whale entered a $365 million Bitcoin short with 40x leverage at $84.04K.
- Unrealized losses of $2 million turned into a $6 million profit overnight.
- Bitcoins SOPR Trend Signal suggests a prolonged consolidation phase ahead.
A big whale risked short selling $365 million of Bitcoin at $84.04K with 40x leverage. The risky trade soon proved to be the wrong decision, as it recorded unrealized losses of $2 million.
Despite this, market dynamics turned swift, and the short now stands at $6 million in unrealized gain. The liquidation of this high leverage position is at $85.59K, and the position of the whale is now the focal point among traders.
Speculation is rising on if this trade was just a strategic bet or if the whale had knowledge of an imminent price move. These large-scale moves tend to cause ripples within the market, influencing sentiment and inducing reactionary trades.
Traders are closely observing as Bitcoin teeters at critical levels, anticipating forced liquidations or another attempt at market manipulation.
Bitcoins SOPR Signal Hints at Extended Consolidation
Along with the whale activity, Bitcoins SOPR Trend Signal is also indicating caution. The metric tracks whether the transaction is done at profit or loss and gives an idea about market sentiment overall.
Historically, if SOPR crosses above a critical threshold, it indicates potential risks of downtrends. Red signals in successive cycles led to market declines and even to bear markets in the past.
In spite of these signs, history shows that Bitcoin can still generate healthy gains even when transaction profitability declines.
The same pattern occurred in 2021 when SOPR weakened but Bitcoin rallied to its all-time high of $69,000. According to analysts, though the big correction is not certain, the time for quick and high-profit trades is gone.
Lower profitability on on-chain trades could indicate sideways movement rather than the immediate turn of the bull or the bear cycle.
Market Outlook: Profit-Taking and Uncertainty
Recent price actions of Bitcoin suggest that the market is possibly in the process of shifting. With decreasing on-chain profitability, short-term traders could reduce exposure while long-term holders remain bullish.
The $365 million short in BTC adds additional uncertainty because any sharp price action in the direction of $85.59K will trigger violent liquidations and volatility spikes.
At the moment, the market is at a crossroads. The recent bull run of 2024 appears to be slowing down, and the upcoming months will possibly decide if Bitcoin consolidates or goes through deeper corrections.
Related Reading | XRP Poised for $5.85 as Downtrend Ends, Technical Indicators Confirm Uptrend
Read more: https://www.tronweekly.com/bitcoin-whales-40x-leverage-short-moves/
Text source: TronWeekly
