Bitcoin’s price experienced a flash crash on Sunday after a prominent whale reportedly sold 24,000 BTC, reversing the gains from Fed Chair Jerome Powell’s dovish comments made previously. This sudden sell-off occurred amidst already cautious sentiments from options traders, who are reflecting bearish outlooks and are actively hedging against potential downturns.

What Happened?

Bitcoin’s price dropped over 2%, swinging from $114,666 to $112,546 within minutes, evidencing market volatility following the sale reported by blockchain analytics firm Timechainindex.com.

Reverse gear (CoinDesk Archives)

The concerns arise from a significant liquidation from a massive BTC holder, as they moved recent balances onto the platform Hyperunite, which seems to be causing a downward pressure on the current pricing.

Market Sentiment

Despite Powell’s hints at possible rate cuts—which initially propelled the BTC price nearly 4%—the options market indicates a prevailing wariness amongst traders, with 25-delta risk reversals remaining in a negative position, suggesting that protective put options are gaining increased prices compared to call options. This indicates traders are preparing for potential declines.

BTC’s risk reversals. (Amberdata/Deribit)

As it stands, significant movement in Bitcoin pricing and market sentiments continues as traders digest the impacts of Powell’s speech and the recent whale activity.