Bitcoin Drops 5% as Whales Cash Out – Panic Sell or Diamond Hands Opportunity?

Bitcoin just got slapped with a 5% nosedive—whales are dumping bags, and retail traders are sweating. Is this the dip to buy or the start of a deeper plunge?

Whale watch turns bloody

Overnight sell orders from mega-holders triggered cascading liquidations. The usual suspects—profit-taking after the recent rally—but the timing reeks of coordinated moves. Remember when 'whale alerts' used to be bullish signals? Now they’re just exit scams in slow motion.

Hold or fold?

Technical support at $58K held… barely. If it breaks, the 200-day MA at $54K becomes the next battleground. Meanwhile, leverage traders are getting wrecked—again—proving Wall Street’s golden rule: the house always wins, especially when it’s a casino with a blockchain paint job.

Bottom line: This is either your chance to front-run the next leg up… or get left holding bags while VCs 'strategically rebalance.' Choose wisely.

Key Takeaways 

Bitcoin dropped to $111k amid rising Binance inflows and a Whale Ratio spike to 0.73. But a drop in Fund FLOW Ratio and a rising Stock-to-Flow signal supply tightening. Price may now consolidate above $113k.

Bitcoin [BTC] has dropped nearly 5% from its late July high of $119.8k, falling to a 3-week low of $112k on the 2nd of August.

At press time, it hovered around $113.6k, with 24-hour trading volume down over 23%, per CoinMarketCap.

This latest drop comes amid growing sell pressure, led by whales and rising exchange inflows — especially on Binance.

Bitcoin Binance inflows surge

According to CryptoQuant analyst Darkfost, Binance BTC inflows have risen from 5,300 to 7,000 BTC in the past month.

Source: X/Darkfost

Although the uptick remains low, it signals a shift in investor behavior, ending a 4-month-long downtrend.

This trend reversal indicates an early shift in BTC investor sentiment as they anticipate increased market volatility or macroeconomic changes.

Source: Santiment

Significantly, a declining Weighted Sentiment further evidences the current shift in investor sentiment.

As of this writing, the metric sat around -0.78, implying that most investors have an unfavorable perception of the market. 

Whales are leading the charge

Amid rising Binance inflows, whales led the pack.

According to CryptoQuant, the Exchange Whale Ratio surged significantly, reaching 0.7, implying whale dominance. 

Source: CryptoQuant

Whales depositing BTC en masse suggests large holders are either taking profit, repositioning, or preparing for further volatility.

But wait! Not all signals scream sell

Interestingly, the Fund Flow Ratio dropped to 0.053, implying that fewer transactions are going to exchanges relative to total network activity. In short, not everyone is dumping.

Source: CryptoQuant

As expected, if less BTC is flowing into exchanges, fewer coins are readily available to be sold.

On top of that, Bitcoin’s scarcity surged to reach a monthly high of 646.21, as evidenced by the rising Stock-to-Flow ratio.

Source: Santiment

Can bulls hold a downward spiral?

According to AMBCrypto’s analysis, Bitcoin experienced a strong downward trend as investors offloaded their holdings while others took a step back from the market.

As a result, Bitcoin’s Directional Movement Index (DMI) declined to 14 while Negative Index surged to 21. Likewise, its Relative Vigor Index declined to -0.19, further confirming weakening momentum.

Source: TradingView

When momentum indicators are set in such a manner, they signal a strong downtrend and weakened upward momentum.

If market sentiment remains negative with mounting selling pressure, bitcoin could drop again and find support around $110k.

However, if those taking a step back in the market rise, Bitcoin may stabilize and trade within a consolidation range of $113k and $117k.