Bitcoin Drops 2.5% as Early Adopters Cash Out Big

• Bitcoin dropped below $112,000 after a whale sold $2.7 billion worth of tokens and crashed the price by $4,000 in minutes. 

• Early Bitcoin holders who bought at $10 or lower are selling large amounts, making it hard for the price to recover. 

• Spot Bitcoin ETFs saw $1.17 billion in outflows last week as institutional investors reduced their exposure.

Bitcoin has experienced a sharp decline, falling below $112,000 amid widespread selling pressure from early adopters and institutional concerns. The cryptocurrency, which reached an all-time high of $124,400 earlier this month, now trades at $111,046 following a 3.11% drop in the past 24 hours.

The broader cryptocurrency market has followed Bitcoin’s downward trajectory, with the total market capitalization declining by nearly 2%. Major altcoins, including Ethereum and Solana, have posted similar losses, reflecting increased investor caution across digital assets.

Massive Whale Transaction Triggers Price Drop

A significant factor behind Bitcoin’s recent decline stems from large-scale selling by early Bitcoin holders. One prominent whale sold 24,000 BTC worth approximately $2.7 billion, causing Bitcoin’s price to drop $4,000 within minutes of the transaction. This single trade eliminated $45 billion from the cryptocurrency market’s value.

Source: Bitcoin Archive, Crypto Whale Activity

Additional selling pressure emerged from another original Bitcoin holder who deposited $2.7 billion worth of tokens to the Hyperliquid exchange over five days while simultaneously purchasing $2.2 billion in spot positions, according to blockchain analytics firm Lookonchain.

Crypto analyst Willy Woo explained that these early adopters, who accumulated Bitcoin at prices of $10 or lower, create significant market pressure when they sell. Each Bitcoin they liquidate requires over $110,000 in new capital to maintain price stability, making upward momentum challenging.

Powell Speech Effect and Market Dynamics

The cryptocurrency market gained momentum following Federal Reserve Chairman Jerome Powell’s Jackson Hole speech, which investors interpreted as favorable for risk assets. However, historical patterns suggest that crypto markets often experience corrections after such events, as noted by market observers.

The Federal Open Market Committee minutes and other weekly regulatory developments contributed to market uncertainty, creating volatility in the current downturn.

Despite the correction, Bitcoin maintains its dominant position in the cryptocurrency ecosystem. Industry figures like Michael Saylor continue to project potential 30% year-over-year growth, though capital rotation remains active.

The selling pressure has extended to institutional products, with spot Bitcoin ETFs recording $1.17 billion in outflows last week. This represents the second-largest weekly outflow since these products launched, indicating institutional investors are also reassessing their exposure.