4 Reasons Why Bitcoin Drops-12/11

Whales are depositing and selling bitcoin

According to one analyst, 98% of the deposits is from the top 10 deposits. This may indicate that bitcoin whales are ready to cash out. We can expect the BTC price would drop deeper.

But institutional investors seems still buying, the analyst further added 

BTC Reserve on Exchanges continues to drop. Yesterday around 40k Bitcoins are withdrawed from exchanges. Some big boy players are still accumulating.

Miners may be selling bitcoin

On Dec 10, Cryptoquant warned the bitcoin dump, saying

$BTC Miners’ Position Index hit the three-year high. It seems miners are selling $BTC to the OTC market or exchanges.

Miners typically have lots of bitcoins and have a great impact on bitcoin prices. When they are willing to dump, the bitcoin price can hardly keep surging.

Mt. Gox bitcoin dump

On Oct 15, Mt. Gox announced to extend the submission deadline for the rehabilitation plan to December 15, 2020. As the rehabilitation plan deadline is December 15, 2020, this means around 150,000 BTC as a refund could be flowing into the crypto market, which could lead to a bearish market potentially.  

Technical Analysis

The 30-day moving average (MA) is a strong support level since the bitcoin price started to surge in October. The correction on Nov 25 and 26 ended when the BTC action nearly touched the 30-day MA support level and then surged to a record high. 

But today although the 30-day MA trend is still up when the BTC action touched the 30-day MA again, it plunged. This could be a warning signal that the bearish market is forming. What to notice is that if the bitcoin price could pull back above the 30-day MA.


Source: Binance, bitcoin chart (30-day moving average in blue)

Image source: Shutterstock


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