Market overcorrection – Whales prepare for bigger moves?


The crypto market experienced a retracement of 50 percent at the end of April. Expected volatility after a peak of $2.6 trillion mid-way in the month.

Market conditions during the week had Bitcoin (BTC-USD pair) below $40,000 (£28,195) trading 4.9% lower to $36,708. Ethereum (ETH-USD pair) pulled back 7% to $2.549, while Altcoins such as Dogecoin (DOGE-USD pair) slumped in cases 11% to $0.31.

More robust altcoins such as Cardona, Binance Coin and G999 remained steady with a minor 4.05% decline. These projects have diverse ecosystems with economic principals (tokenomics) play a role in supporting price points in times of market fluctuations.

Loses of between 5%-25% on Bitcoin sales of 1.2 million coins had been forfeited by short-term holders commented Chainlysis. In Fiat terms, the market had sustained at least $3.2 billion in losses.

Environment, Social and Governance

A multitude of factors has influenced the market, the current geopolitical climate concerning regulation, and social obligations linked to climate control research. Institutional buying had been “paused” due to concerns over Bitcoin’s energy use.

Iran announced it was banning the energy-consuming mining of cryptocurrencies after some of its cities experienced blackouts. A drought plaguing the region had affected hydroelectric power generation with a 2GW drain to city grids.

Concerns over Beijing’s position on crypto exchanges resulted in major players losing funds during the market drawback. The Chinese government wishes to reduce the active role that crypto mining and trade has in the financial sector. The recent crackdown in conjunction with environmental concerns raised by Billionaire Elon Musk had accelerated the downward trend developing in crypto.

Big Data The Industry Requests

It remains evident that the revolutionary use of hashing sequences and storage security that blockchain technology offers, will be a crucial component of network scalability. Data shows that wealthy investors (“whales”) bought the dip, buying 77,000 Bitcoin following the downward position at $37 000 worth approximately $2.85 billion.

Blockchain technology relies heavily on big data, market acceleration towards digital payment infrastructure to meet the increasing demand for global consumer information. Integration of key systems is necessary to avoid costly supply chain delays such as APIs are needed and methods to authenticate data on larger scales.

Liquidating Longs

Market players position themselves to create liquidity in the market by exiting positions with high volume. This takes the form of selling-off positions at peak prices liquidating the funds in long positions or increasing volume in the market at lower positions, which liquidates the shorts(sellers).

The direction which the market takes depends on many factors such as political or geographical. Market manipulation is a common occurrence creating events to leverage fear to create better buy-in opportunities for investors.

Recent concerns drawn from key economic players such as the CEO of Tesla (Elon Musk) have aided in the retracement of the crypto markets. Sustainability surrounding the mining process of cryptocurrencies has allowed for reasonable doubt.

Bitcoin Mining vs Financial System

Energy consumption differs from Carbon emissions, a reduction of negative externalities when data reveals an estimation of 73% of bitcoin’s energy consumption was carbon neutral.

Bitcoin consumes around 32.56 TWh with low carbon emissions powering an independent payment system. When we do an analysis on the traditional banking system we see a bulky infrastructure that houses unproductive resource use with human efficiencies present.

The traditional banking system, by comparison, includes three areas: server costs, branch costs, and ATM costs. According to the World Bank, there should be on average 665 000 bank branches, 100 servers per bank, and worldwide ATM services.

An estimated total electrical consumption for banks during a year, on those three metrics consists of: 26 TWh on servers, 87 TWh on branches and 26TWh on ATMs for a total of close to a 140 TWh a year.