Bitcoin Crash on Binance and Ethereum Under Selling Pressure from Major Investors

Bitcoin Crash Due to Liquidity Shortage

On the cryptocurrency exchange Binance, Bitcoin temporarily fell to $24,000 during the Christmas holidays ^[1]. This represents a 72 percent price decline within minutes, while the official Bitcoin price stood at $87,700 ^[1].

The background of the dramatic price drop is a liquidity shortage at Binance ^[1]. Due to the Christmas holidays, trading volume on centralized exchanges is low, allowing large sell orders to crash the order book ^[1].

"The low liquidity of some trading pairs on several exchanges has led to strong fluctuations, resulting in temporary price dislocations and arbitrage issues for several minutes," explains analyst Joao Wedson on X ^[1].

Suspicion of Market Manipulation

Some market observers suspect market manipulation ^[1]. The suspicion: A short seller deliberately crashed the price to obtain favorable arbitrage opportunities ^[1]. This theory is supported by the fact that the price on Binance rose back above $87,000 shortly after the crash ^[1].

Ethereum Under Selling Pressure

Parallel to the Bitcoin crash, Ethereum faces significant selling pressure. The Ethereum price rose only marginally to $2,940.22 over the past 24 hours, while trading volume fell 43 percent to $12.5 billion ^[2].

BlackRock recently deposited approximately 2,292 BTC ($199.8 million) and 9,976 ETH ($29.23 million) to Coinbase Prime ^[2]. This movement has led to increased bearish pressure, as moving tokens to an exchange is often a precursor to sales ^[2].

Hayes Sells Ethereum for DeFi Tokens

BitMEX co-founder Arthur Hayes also deposited 682 ETH ($2 million) to Binance ^[2]. Over the past week, Hayes sold a total of 1,871 ETH ($5.53 million) and purchased ENA, PENDLE, and ETHFI with the proceeds ^[2].

Hayes had previously stated: "We are rotating out of $ETH and into high-quality DeFi names, which we believe can outperform as fiat liquidity improves" ^[2].

Counter-Movement by Largest Ethereum Holder

While these major investors are selling, Tom Lee's BitMine, the world's largest corporate holder of Ethereum, has invested an additional $201 million in Ethereum ^[2]. The company now holds approximately 4.07 million ETH on its balance sheet worth about $11.97 billion ^[2]. The purchase is part of the company's goal to hold 5 percent of the total ETH supply; currently it stands at 3.36 percent ^[2].

Technical Indicators Show Uncertainty

Technical analysis shows a mixed picture for Ethereum. The Relative Strength Index (RSI) is moving in the low to mid-40s range, suggesting equilibrium and signaling that bears and bulls are battling for dominance at this level ^[2].

The Moving Average Convergence Divergence (MACD) indicator has created uncertainty in this zone after the blue MACD line crossed above the orange signal line ^[2]. The green bars have diminished, indicating weak momentum despite the positive MACD outlook ^[2].

If the Ethereum price breaks through the 0.786 Fibonacci retracement level at $2,762, the next major support lies at $2,174 ^[2]. In a bullish scenario, ETH could reach the upper boundary of the falling channel at $3,397 ^[2].