Bitcoin Reverses Course Sharply Post-Powell, Options Signals Hint at Growing Uncertainty

Bitcoin Sheds Gains in Sudden Crash as Whale Dumps 24,000 BTC, Options Market Flashes Caution

Bitcoin reversed its recent rally on Sunday after a massive sell order from a whale triggered a sharp, sudden drop in price—erasing momentum built after Fed Chair Jerome Powell’s dovish remarks.

BTC slid more than 2% in under 10 minutes, plunging from $114,666 to $112,546 around 07:40 UTC, eventually dipping below $111,000 before stabilizing near $112,800.

Whale Sell-Off Sparks Flash Crash

Blockchain data from Timechainindex.com shows the sell-off was driven by a single large holder who offloaded 24,000 BTC—valued over $300 million—into illiquid market conditions. According to researcher Sani, the whale sent the entire balance to exchange Hyperunite, with 12,000 BTC transferred just hours before the crash.

“These funds were dormant for nearly six years after originating from HTX,” Sani noted. “Although the 24,000 BTC has been liquidated, the whale still controls over 152,000 BTC, suggesting more potential market impact.”

Powell Rally Reversed

The crash wiped out gains from Friday, when Powell’s speech at Jackson Hole hinted at future rate cuts and downplayed the inflationary impact of trade tariffs. That dovish tone sparked a short-lived risk-on rally, pushing BTC from $112,500 to $116,900 and boosting U.S. equities.

Many analysts anticipated a September rate cut would support further upside in BTC and ETH, but the flash crash has tempered that optimism.

Derivatives Market Shows Persistent Caution

Despite macro signals, bitcoin options traders remain wary. According to Amberdata, Deribit’s 25-delta risk reversals remain in negative territory through December—a sign that demand for protective puts still outweighs calls.

Negative risk reversals indicate traders are hedging against downside volatility, even as spot markets react positively to central bank cues.