Bitcoin's $2B Liquidation Spark: Whale Moves Trigger Volatility

Bitcoin's recent price drop below $100,000 has triggered a liquidation event worth over $2 billion, dampening market sentiment. Despite hopes for a positive outcome from David Sacks' digital asset press conference on Feb. 4, the event failed to boost Bitcoin's price, with the US president's directive still under evaluation for a potential Bitcoin Strategic Reserve.

Adding to the market's unease, a significant movement of 49,700 BTC from the 6-12 month spent output age band (SOAB) has been observed. This large-scale transaction could lead to market volatility and potentially impact the BTC price, as a substantial portion of these Bitcoin is expected to be sold in the coming days, creating selling pressure in the market.

Historically, similar market movements have been associated with whale activity and possible market manipulation, leading to retail-driven sell-offs and better lower entries for large investors. Furthermore, overall Bitcoin sentiment is entering the bearish zone, according to investment analysis platform Alphractal. However, a negative sentiment could present better buying opportunities in the future, allowing investors to act intelligently and counter the herd mentality prevalent in the crypto market.

Bitcoin has been trading lower over the past 48 hours, with a symmetrical triangle forming on the 1-hour chart. With bullish momentum unlikely to materialize this week, BTC may chase liquidity zones around $100,000 before testing the lower order block between $94,100 and $92,600. In a low-volume trading environment, it is common for BTC to trade between liquidity levels where trader positions are estimated. The price is currently at no man's land after consolidating sideways over the past day.

However, with an overall bearish outlook, Bitcoin could fill the fair value gap at $99,500 over the next few hours before threading lower down the charts in the coming days. On the contrary, whale addresses have added more than 30,000 BTC in the recent dip, which can typically trigger a short-term bounce. If prices close above $100,000, the current bearish market will be invalidated, potentially turning the tides in favor of the bulls.