Bitcoin (BTC) topped out at around $46,000 on April 4 before freefalling back to $38,000, causing much frustration among crypto traders who have been so used to the market’s unreal returns in the past two years after the March 2020 crash.
February and March showed signs of recovery, especially after the steep declines in December and January. But, the question is, why has the bullish momentum suddenly come to a halt?
Continued S&P 500 correlation
The correlation between crypto and equities, particularly Bitcoin and the S&P 500, continues to exist and is expected to last until mid-May when Jerome Powell and the United States Federal Reserve announce a likely 0.5% rate hike to combat inflation.
However, this doesn’t necessarily mean that Bitcoin will exhibit further declines. Suppose cryptocurrencies continue to mimic equity price movement and not the other way around. In that case, many speculate that although the S&P 500 has been dropping lately, rate hike fears would likely have been baked in ahead of the Fed’s scheduled meeting.
Bitcoin whales purge, Tether whales surge
There are two go-to whale tiers crypto data platform Santiment consistently looks at to analyze full-market future price movement: Supply held by addresses with 100 to 10,000 BTC and supply held by addresses with 100,000 to 10,000,000 Tether (USDT).
Over the past two months, BTC whales from this key group have dropped 0.6% of their holdings. Meanwhile, the key USDT group has actually added 1.8% of the top stablecoin’s supply.
Although large whale addresses have dumped their BTC supply, evidence shows…