• Whale manipulation did not crash the price in March 2020, asserts Stock-to-Flow creator PlanB.
• The analyst claimed that the cryptocurrency’s growing correlation with the U.S. benchmark S&P 500 led it lower.
• He further noted that Bitcoin’s wild downside price actions in November 2019 and December 2019 appeared in the wake of the U.S.-China trade dispute and the Federal Reserve’s proposal to end its decade-long expansionary program.

Whales don’t crash Bitcoin, at least according to PlanB.

The creator of the popular Stock-to-Flow model wrote on Tuesday that the cryptocurrency’s last significant dip in March 2020 surfaced due to its positive correlation with the S&P 500. The statement conflicted with reports that indicated price manipulation by traders holding a higher quantity of bitcoin tokens.

In March 2020, the price of bitcoin had crashed by more than 60 percent within just 24 hours. On-chain data analysis portal CryptoQuant later reported that whales were depositing Bitcoin into cryptocurrency exchanges en masse at least four days before the March 12-13 crash.

The higher capital inflow coincided with major downside moves in the Bitcoin spot market. On March 8, for instance, the BTC/USD exchange rate plunged by more than 10 percent. That eventually transpired into a 60 percent crash by March 13.

The period saw an average inflow per transaction topping near 6,000 BTC from as low as 1,000 BTC.

The Virus Did It

PlanB differed from views that supported the theory of whale manipulation behind the Bitcoin price crash. Instead, the analyst said the cryptocurrency fell under the pressure of a global market rout caused by lockdowns to contain the spread of a pandemic.

“BTC futures or whales did not play a big role,” he said on Tuesday.

The most popular theory points to investors with exposure in both equities and cryptocurrency markets selling their holdings to raise cash. It may not have an orchestrated move but a mere reaction to the worsening macroeconomic outlook.

PlanB recalled similar downside moves in the Bitcoin market to explain its uncanny correlation with the S&P 500. The analyst noted that the cryptocurrency plunged by 38 percent in November 2019 against the backdrop of the U.S.-China trade war.

S&P 500 had registered a modest drop owing to similar macro catalysts.

Bitcoin price chart on TradingView.com showing it dipping against macro narratives. Source: PlanB, TradingView.com

PlanB also referred to Bitcoin’s dip towards $6,430 in December 2019. He said the plunge came in the wake of the Federal Reserve’s decision to pause/reverse its 11-year long “quantitative easing” program. Traders perceived the event as bearish for Bitcoin and sold it to raise cash.

Bull Run Incoming

The quantitative easing restarted in March 2020 after the U.S. stock market crashed to its lowest levels since December 2016. The trillions of dollars worth of stimulus helped Bitcoin and the S&P 500 registering a record-breaking recovery rally.

PlanB last week said that both the markets could rise in tandem as long as the Fed keeps supporting the economy with its expansionary policy. He predicted that Bitcoin would hit $18,000 in the coming sessions.

QE, money printing, brrrr causes both S&P and BTC (and bonds and real estate amd gold etc) to go up up up

— PlanB (@100trillionUSD) June 23, 2020

Bitcoin was trading at $9,618 at the time of this writing, up 33.57 percent on a year-to-date timeframe.