Bitcoin’s price took a nosedive in the early hours today, undoing the optimism sparked by Federal Reserve Chair Jerome Powell’s recent remarks. The cryptocurrency briefly dipped below $111,000, an unexpected turn given Friday’s upward momentum following Powell’s seemingly dovish speech at the Jackson Hole symposium. This sudden flash crash was primarily driven by a massive sell-off from a single whale, who offloaded 24,000 BTC—worth over $300 million—into the market, according to data from Timechainindex.com.
Whale’s Massive Sell-Off
The market tremor began when this particular whale transferred 12,000 BTC today alone, and the unloading continues. Sani, a researcher from Timechainindex.com, disclosed on X that the whale still controls a staggering 152,874 BTC across various addresses. The origins of these funds trace back to HTX, with the hoard lying dormant for nearly six years before recent movements. While the sell-off pushed Bitcoin’s price to a low of just under $111,000, it has since clawed back to around $112,800, as reported by CoinDesk. This event echoes similar patterns discussed in Bitcoin Flash Crash Triggers $550M in Sunday Liquidations as Ether Rotation Builds, where significant liquidations have led to notable market shifts.
Such large-scale liquidations often cause ripples across the market, particularly when liquidity is thin. The timing couldn’t have been more pivotal, occurring just as market participants were digesting Powell’s comments, which had initially buoyed sentiment. Friday’s speech hinted at possible interest rate cuts while downplaying the inflationary effects of tariffs, causing Bitcoin to leap from $112,500 to $116,900, alongside a broader risk-on rally in U.S. equities.
Options Market Signals Caution
Despite the initial euphoria from Powell’s dovish tones, the options market tells a different story. Data from Amberdata reveals a sustained bearish sentiment among traders, as evidenced by the negative 25-delta risk reversals on Deribit-listed Bitcoin options. This metric, which compares the cost of protective puts to bullish calls, suggests that market players are hedging against further declines, despite the Fed’s seemingly supportive stance.
Put options, traditionally more expensive in bearish markets, indicate a lingering wariness about Bitcoin’s near-term trajectory. Even as analysts anticipate a potential rate cut in September—which could propel Bitcoin and ether to new highs—the options market remains unconvinced, pricing in the possibility of renewed volatility. As explored in Here Is Why Bitcoin’s Flash Crash May Signal Altcoin Season: Crypto Daybook Americas, such volatility could potentially herald a shift in market focus towards altcoins.
Historical Context and Future Implications
This isn’t the first time large-scale Bitcoin transactions have disrupted the market. Historically, whale movements have been a double-edged sword, providing both opportunity and risk for traders. The current situation underscores the delicate balance between macroeconomic influences and individual market actions. While Powell’s speech injected optimism, the whale’s sell-off serves as a stark reminder of the market’s susceptibility to sudden shifts.
Looking forward, the cryptocurrency community is keenly watching the Federal Reserve’s next moves. A rate cut, if realized, could reignite bullish sentiment and potentially stabilize Bitcoin’s price. However, the persistent caution in the options market raises questions about the sustainability of any rally. Will the market’s optimism prevail, or are we on the cusp of further volatility? The coming months will be crucial in shaping Bitcoin’s trajectory as traders navigate these choppy waters.
Source
This article is based on: Bitcoin Reverses Powell Spike With a Flash Crash as Options Market Signals Jitters Ahead
Further Reading
Deepen your understanding with these related articles:
- Bitcoin price charges to $116K as Fed's Powell hints at interest-rate cut
- Ethereum, Bitcoin Spike After Powell Signals Interest Rate Cut
- Powell Sparks $300M Surge Into Bitcoin Futures Within Minutes At Jackson Hole
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
