Bitcoin Flash Crash: Billions Shift from BTC to ETH as Whales Rotate

Bitcoin (BTC) has witnessed heightened price volatility over the past days, a trend that has stirred several questions among market observers. Some crypto commentators believe that the asset’s recent uneven movement is down to the activities of early BTC investors, often called “OG whales.”

Whale Rotations Spark Sudden Bitcoin Selloff

During the Sunday trading session, Bitcoin posted a sharp drop of over 2% in under 10 minutes, catching the eyes of crypto traders on X. Bitcoin commentator Willy Woo attributed the coin’s slow movement to on-chain actions by OG whales.

For context, these OG whales are large addresses that accumulated Bitcoin at $10 or less during the 2011 market cycle. Woo explained that over $110,000 worth of fresh capital is needed to offset every Bitcoin sold by the old wallets.

This differential in cost basis, the supply they hold and their rate of selling has profound impacts on how much new capital that needs to come in to lift price.

Willy Woo

The recent trend comes as Bitcoin witnessed a $45 billion capital erasure on Sunday. Many within the crypto community have highlighted a BTC whale’s capital rotation from Bitcoin to Ethereum as the reason for this market cap decline.

According to chatters, the whale rotated over $2 billion worth of BTC into Ether over the past seven days, fueling selling pressure across the market. This sudden price drop erased almost 2.2% of the OG coin’s value, pushing it down from $114,666 to $112,546 in 9 minutes.

Ether also dropped by 4% from $4,937 to $4,738 during the same period, although both assets later recovered modestly from the flash crash.

Whale Shifts $2.7B BTC Into ETH Buys and $1.3B Staking

On August 16, a crypto whale was spotted moving Bitcoin to the decentralized crypto perpetuals platform Hyperliquid. As per Blockchain.com data, the whale transferred 24,000 BTC ($2.7 billion) across six transactions spanning the last nine days.

Crypto analyst MLM noted that about 18,142 BTC, worth $2.04 billion, has already been sold. He added that $1.9 billion of this amount was used to purchase 416,598 ETH.

The analyst added that the large address is also behind other wallets moving Bitcoin to Hyperliquid for more Ether purchases.

Here are other activities conducted by the whale:

• Currently selling 5,968 BTC ($670 million), with 4,968 BTC ($678 million) still outside Hyperliquid.
• Staked about 275,500 ETH, totaling around $1.3 billion according to current market rates—a move which appears to be a long-term strategy.
• Opened 135,263 ETH ($642 million) in perpetual longs, for a total exposure of 551,861 ETH (approximately $2.62 billion).

According to MLM, the long entries were timed to get ahead of other fast-moving players, resulting in a $185M profit on the ETH/BTC trade. 

He effectively frontran the people who were trying to frontrun him.

MLM

He admitted that as market participants reacted positively to the whale’s earlier spot buys, the long ETH positions climbed in value. But a series of sell orders followed as the whale started closing positions, and traders eventually noticed the market strategy. 

BTC Whale Moves Funds as Capital Shifts to Ethereum

TimechainIndex.com founder, Sani, mentioned that the Bitcoin whale still holds about 152,874 BTC across several wallets. In an X post, he explained that the funds were initially moved from crypto exchange HTX (formerly Huobi) in 2019 and had remained dormant until last week.

Sani also said that another large BTC holder shed about 670 Bitcoin ($76 million) to open a long Ether position on Thursday, further highlighting the current trend of capital rotation from BTC to ETH. Ethereum touched a new all-time high on Sunday, while Bitcoin fell below the $111,000 mark in a volatility-heavy market session.