The Bitcoin Price Crash was Caused by Whales – Chainalysis Report


This post was most recently updated on April 25th, 2020

While many small investors panic sold their bitcoin holdings during the last crash, the actors that caused the massive crash in bitcoin price are actually professional traders and institutional investors, according to a research from Chainalysis.

Trading Volumes Surge on Crypto Exchanges

In a report published recently by Chainalysis, researchers show a surge in trading volume on crypto exchange most;y by sellers which drove the crypto market to a new all-time high.

The report indicates that everything started on 9 March when most of the biggest exchanges seen a large movement from those who want to sell bitcoin. More than 475,000 has been received by exchanges on 12 and 13 March which is a nine times higher volume more than the average.

day trasfers - The Bitcoin Price Crash was Caused by Whales - Chainalysis Report

“Exchanges received 52,000 bitcoin per day on average from January 1 to March 8, 2020. From March 9 to March 16, they received 1.1 million bitcoin over 8 days, or 712,000 more than average. Of that 712,000 bitcoin, between 40,000 and 240,000 remain on exchanges, meaning that only between 6 and 34% of the extra inflow has either yet to be sold or has been sold but could easily be sold again by the new owners. In other words, the majority of excess bitcoin arriving at exchanges has been sold, and the worst of the oversupply appears to be finished for now.” Reads the report.

The massive Bitcoin price crash came in the midst of a global panic caused by coronavirus, the pandemic that affected all the sectors of the economy. Financial markets, oil, and even precious metals are falling, while central banker are pumping trillions to “save the economy”.

Bitcoin which is considered a safe haven by many crypto enthusiasts has lost half of its value compared to the highs it reached in February. As it appears from the analysis, those who dumped large amounts of crypto in the markets are professional traders and institutional investors. Everyone expected that those institutional investors would drive the markets to new highs.

“The majority of bitcoin flowing into exchanges came from high-value transfers, as is normally the case. In particular, transfers of 10-100 and 100-1,000 bitcoin were in total responsible for around 70% of all bitcoin sent and received by exchanges in recent days, a similar but slightly higher share than usual. Around 10% of bitcoin was from transfers of over 1,000 bitcoin.” Reads the Chainalysis report.

All these indicators, adds the report, indicate that whales were those who drove the market to this unprecedented crash but retail user joined them on both sides longing and shorting the markets.

Will Bitcoin Price Stabilize?

Since the biggest part of the institutional investor left, will retail investors be able to hold the crypto market on their shoulders? The Bitcoin price has also recovered some of the losses and it is hovering near $5,600 at the time of writing.

However, giving the unknown nature of the new pandemic and the uncertainty this caused to the economy it is hard to predict the next move bitcoin will take concludes the Chainalysis report.

However when panic is gone big investors will come back to push the market higher again.

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About Author

Ethan Hunt

Bitcoin Maximalist and Toxic to our banking and monetary system. Separation of money and state is necessary just like the separation of religion and state in the past. Also, pro-local, pro-global and anti-national.

Disclaimer: All content found on is only for informational purposes and should not be considered as financial advice. Do your own research before making any investment. Use information at your own risk.

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