Bitcoin dipped over the weekend following a short-lived rally, as analysts suggested that large holders were shifting their positions from bitcoin to Ethereum.
According to The Block's crypto price page, bitcoin dropped 2.12% to $112,692 as of 12:26 a.m. ET on Sunday. The cryptocurrency had fallen to a low of around $112,500 on Sunday.
Bitcoin's recent drop follows a surge above $117,000 last Friday. The brief rally was fueled by U.S. Federal Reserve Chair Jerome Powell's comments at Jackson Hole, where he hinted at a possible interest rate cut in September.
"Bitcoin's [spike] after Powell's speech was driven by thin liquidity, not lasting conviction," said Kronos Research CIO Vincent Liu. "Once leverage unwound and no fresh catalysts emerged, momentum quickly faded, leaving BTC back below key levels."
Nick Ruck, director at LVRG Research, noted that bitcoin's retreat reflects a "market recalibration" as lingering market uncertainties overshadowed Powell's dovish speech.
Whale movement
Meanwhile, posts circulating on social media platform X suggested that a single whale sold over 24,000 BTC over the past several days, causing a "flash crash" in bitcoin price.
According to screenshots shared by WhaleWire CEO Jacob King, wallet address "19D5J…WoZ1C" moved multiple bulks of bitcoin ranging from 3,000 BTC to 6,000 BTC to different addresses across Aug. 16 to 24.
"Once the whale started selling, it triggered a panic cascade, with other traders selling too, amplifying the crash," King said on X. "Most of the money is being moved into Ethereum, $2B bought and $1.3B staked."
However, Kronos' Liu told The Block that it is difficult to pinpoint a "single culprit" when it comes to bitcoin price.
"It's more likely the work of multiple whales or an exchange with significant holdings, rather than a single entity," Liu said. "Large-scale transactions like this often involve institutional players or coordinated actions."
BTC to ETH
In recent weeks, the market has seen some major holders switching out their bitcoin holdings for Ethereum.
Last Friday, blockchain analytics firm Lookonchain reported that a whale wallet recently rotated part of its 100,784 BTC to buy 62,914 ETH and establish a 135,265 ETH derivatives long position.
Spot exchange-traded funds have shown a similar trend among institutional investors, where ether ETFs have seen larger inflows compared to smaller inflows or outflows spotted among BTC ETFs in August.
"With ETH ETF staking approval on the horizon, expect increased staking activity and potential altcoin outperformance," Liu said. "Ethereum's poised to take center stage."
LVRG's Ruck also said that he sees a trend of high-value holders selling BTC for ETH, betting on Ethereum's upward potential backed by growing corporate reserves.
Bitcoin dominance is currently at 57.94%, down from around 61% at the beginning of this month, suggesting that investors are shifting their focus to altcoins. Ethereum is currently trading at around $4,712, after setting a new all-time high last Friday above $4,946.
In the short to medium term, the market will likely see more volatility as traders keep a more keen eye on key macroeconomic data including Thursday's initial jobless claims, Liu noted.
