Joe007, a popular bitcoin whale known for holding large positions on the Bitfinex cryptocurrency exchange, has revealed on social media he believes several factors could lead to a major downturn in the cryptocurrency market.
When chatting with his followers, Joe007 revealed that he expects many long-term bitcoin holders to sell their holdings and cash out “en masse” which would lead to a “sudden balance shift that precipitates a parabolic curve blow-off.”
It’s worth noting that while bitcoin’s whale population has been seeing new highs this year, data shows long-term bitcoin holders are selling some of their holdings and cashing out. Joe007 added in a subsequent tweet that if most proponents aren’t ready to buy at an all-time high, there shouldn’t be a reason for institutions to do so as well.
When asked about a potential event that could lead to a long squeeze and subsequent crypto market drop, the bitcoin whale said that while bad news are usually ignored in the “bull part of the cycle,” there could still be shifts in demand and supply.
Mt. Gox’s trustee, for example, has recently drafted a rehabilitation plan for the exchange’s creditors, which could see 160,000 BTC be released into the hands of the exchange’s clients who may immediately sell their holdings to finally close that chapter.
On top of that, Joe007 pointed out that a market meltdown could drag BTC along, just like it did in March when top U.S. equity market indices entered bear market territory and bitcoin lost about half its value over a two-day period.
The bitcoin whale also pointed to altcoins and revealed he doesn’t believe these will keep on rallying if the price of BTC falls, challenging the “alt season” narrative. The whale implied that while institutions are now adopting BTC and even including the cryptocurrency in their treasuries, the same isn’t happening for altcoins.
Per his words, in the next bear phase he expects altcoins to “lose a bigger share of their capitalization yet.”