The price spike on flagship cryptocurrency, Bitcoin that occured at the start of the week took many by surprise. While it may have been a dream come true for investors, it was a bad day for futures traders who shorted the asset thinking the bears were still reigning supreme. According to reports, over $600 million short positions were liquidated within an hour.
Following the price spike near $40,000, the Bitcoin Trust premium of asset management firm Grayscale recorded a quick recovery. Edging towards the zero axis, the premium attained a 2-month high of -3.407. According to available data from Tiger Trade, GBTC premium jumped over 24% on July 26 during the Eastern U.S. trading hours.
In a related development, on-chain analytics firm, Santiment, showed in its chart that bitcoin accumulation by whales continues. Santiment disclosed in a tweet that wallets already holding 100 to 10,000 $BTC have been accumulating the crypto asset since the mid-May crash. Accordingly, about 130,000 BTC have been amassed by these whales since late June and 40,000 BTC more since the last days.
Bitcoin Retraces as Amazon Denies Bitcoin Payments Report
After pulling a great performance on Monday contrary to its pace last week, Bitcoin retraced by 5% in the wake of a rebuttal by E-commerce giant, Amazon against the report of Bitcoin payments. The report had spread wild and was responsible for the 11% spike to $40,000. However, a correction was to happen after Amazon denied the claims. Initially, price fell to $36k before repositioning at $37k as of press time. Market cap of the asset also tumbled from $792 billion to $695 billion.
The spike and correction happened in the same fashion as that of March – May, when Tesla had announced a Bitcoin payments integration for its electric vehicles. The first announcement had caused a similar spike, only for the EV manufacturer to announce that it could no longer continue with the policy, thereby bringing the spike to a halt and a retracement followed afterwards.
Whale Capitalizes on Short Monday Spike
Meanwhile, the Monday spike provided whales with the opportunity to trade off some of their holdings. According to crypto journalist, WuBlockchain, some amount of BTC was transferred to FTX exchange, making it the largest single-hour inflow.
In contrast, on-chain analytics firm Santiment reported an outflow of 40,000 BTC within the last 10 days by whales already holding between 100 – 10,000 BTC. This brings it to 130,000 BTC accumulated within the past five weeks. Bitcoin has to break through $40,000 resistance zone before an upswing can be ascertained.