Last week—and this week’s Monday—we saw the crypto market crash without any apparent reason. Bitcoin lost around $2,000 in value (or even more in stretches), falling from early last week’s $30K to below $28K. It was a bit of a wakeup call that reintroduced volatility to the table, although many saw it as a chance to invest. Those who did were lucky, as the rebound helped Bitcoin rise to the previous support levels.
While it’s still off the $30,000 mark and last week’s predictions, things are looking better. The real reason for the crash was the awakening of dormant whales. They were nowhere to be found as of late until they caused serious market turbulence last week which influenced Bitcoin’s prices. Another reason for the price crash is EU’s MiCA law which was passed last week after a year of discussions and plans.
Dormant Whales a Major Factor
One of the major factors that caused the market to crash down was the awakening of long-dormant whales. When saying long-dormant, we don’t mean addresses not used in the past year. Several wallets that have been dormant for 10+ years have suddenly popped up. More specifically, three whales with wallets that held 8,199 BTC have become active out of the blue. The total market value of those coins is just over $225 million.
More notably, a whale holding 79,957 BTC which is almost $2.20 billion has activated its account after 12 years. When this holder received his Bitcoins, their value was $0.93. It goes to show that many have waited for a long time, and they might now try and make a sale and turn billionaires. Wild.
The re-emergence of these whales has caused a stir in the Bitcoin market. Large sell orders could push the price further down, but luckily for everyone involved, Bitcoin managed to rebound nicely.
MiCA Is Finally Live
After years of negotiation and going back and forth, the European Union has finally passed the new regulatory framework for digital assets into law. Named MiCA, it will allow the EU to peek into any crypto transactions—including private crypto wallets and take action if necessary. Not everyone is thrilled about it, obviously, but the EU reassures investors that it’s only there to prevent money laundering and terrorist financing.
This is the first law of its kind that broadly regulates digital assets in particular. It’s nowhere to be seen in the USA and other countries, so the EU is somewhat a pioneer in the crypto space right now.
Of course, the new law can do a lot of damage to the crypto market, as it will regulated more than 10,000 digital assets. It’s set to go live soon, just 20 days after being published in the EU’s official journal. Once it does, companies will have to comply with MiCA, and each transaction will be under the EU’s watchful eye. It certainly was another major reason for the price drop.
Luckily, Bitcoin has rebounded and currently sitting in the mid-$28,000s. While the market is still in the red, calmer waters should be ahead of us, and with it, we may see it shooting over the $30K mark.