Bitcoin, large wallet sudden movement...Said it was a bull market, but 10-year support line 'collapsed'

▲ 'Digital Gold' Bitcoin (BTC)

Large wallet movements related to major trading and custody platforms and the deterioration of long-term technical structures have been cited as the reasons why Bitcoin (BTC) showed weakness despite positive market sentiment. While investors still anticipate a mid-to-long-term upward trend, large-scale Bitcoin movements have been interpreted as selling pressure, increasing short-term volatility.

Bitcoinist reported on May 21 (local time), citing data released by a cryptocurrency analyst on X (formerly Twitter), that large-scale Bitcoin movements were detected in wallets connected to major exchanges and custody platforms. This trend included movements related to Coinbase Prime wallets, Binance addresses, Wintermute wallets, OKX deposit flows, and Bybit.

The analyst stated that hundreds of millions of dollars worth of Bitcoin moved in a short period, and it appeared to be aggressive selling activity by large market participants at a time when prices were already under pressure. Coinbase Prime is strongly associated with institutional custody and trading services, and Wintermute is considered a major market maker in the cryptocurrency market. With the addition of wallet movements related to Binance and OKX, it was interpreted that highly liquid investors were adjusting their positions during the downward phase.

However, organized selling cannot be concluded solely from wallet movements. Bitcoinist noted that large movements connected to exchanges can be perceived by the market as a signal of major holders preparing to sell, and at times when prices fail to maintain momentum, such perception alone can quickly increase volatility.

Technical burdens also increased. According to a chart previously shared by the same analyst, Bitcoin was shown to have broken below the upward support trend line that had been maintained since 2014. This structure withstood major bear markets in 2018 and 2022, but an analysis suggests it collapsed during the recent decline. The breakdown of the long-term support line was interpreted as a signal increasing the possibility of a capitulation phase where investor sentiment rapidly weakens.

Market confusion was further exacerbated by the divergence between investor sentiment and price trends. After reaching an all-time high earlier this year, many investors still expected further gains for Bitcoin. Even during the recent decline, Bitcoin fell by 2.7% and 4.4% over the past 7 and 14 days, respectively, but showed an upward trend over a 24-hour period. The 30-day and 60-day trends also remained positive, indicating that many investors viewed this weakness as a temporary correction within a long-term upward trend.

Bitcoinist assessed that Bitcoin's weakness continued due to the clash of large wallet movements, a weakened technical structure, and long-term optimism. With Bitcoin failing to recover $80,000, the market is closely watching how much the movements of large holders and the breach of the long-term trend line will increase short-term downward pressure.

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