Institutions May Be Accumulating Bitcoin After Major Exchange Movements

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Cryp­to mar­kets have sta­bi­lized after last week’s blood­bath and on-chain asset move­ments may sug­gest that insti­tu­tion­al investors are start­ing to load up on bit­coin again.

Cryp­to mar­kets have been ham­mered over the past two weeks, dump­ing 25% or almost $500 bil­lion since the begin­ning of the month. The rout cul­mi­nat­ed on Fri­day with a year­ly low in mar­ket cap below $1.3 tril­lion, but things took a breather over the week­end with many cryp­to assets even post­ing mar­gin­al gains.

Sharp mar­ket down­turns are not always bad news as they pro­vide entry points for investors seek­ing longer-term gains. That appears to be what is hap­pen­ing at the moment accord­ing to Cryp­to­Quant CEO Ki Young Ju.

The blockchain ana­lyt­ics firm chief said that “insti­tu­tion­al investors are buy­ing BTC via mar­ket mak­ers right now.”

Exchange movements suggest bitcoin accumulation

Ki Young Ju delved into coin move­ments on major exchanges over the past week to arrive at his conclusion.

On-chain ana­lyt­ics revealed that the mar­ket mak­ers who use the Gem­i­ni exchange sent around 84,000 BTC to Binance from May 7 to 10, hit­ting an all-time high.

He added that the major­i­ty of sell­ing pres­sure came from Coin­base as they had the largest BTC inflows from Binance. BTC/USD spot trad­ing vol­ume on Coin­base hit a year­ly high while the Coin­base Pre­mi­um tapped a three-year low of ‑3%.

He con­clud­ed that mar­ket mak­ers had already sent around $2.5 bil­lion worth of bit­coin to exchanges last week, adding: “Not sure they fin­ished sell­ing, but it is high­ly like­ly for the accu­mu­la­tion from insti­tu­tions since Coin­base digest­ed the major­i­ty of sell­ing pressure.”

Around three-quar­ters of the trad­ing activ­i­ty on Coin­base is insti­tu­tion­al­ly dri­ven accord­ing to its most recent rev­enue report.

The Luna Guard Foun­da­tion was one of those major sell­ers, hav­ing sent around 80,000 BTC to Gem­i­ni and Binance last week at the time of the Ter­ra collapse.

Ki Young Ju sum­ma­rized that “insti­tu­tions tried to stack BTC from $30k but had to rebuild the bid walls at 25k due to the unex­pect­ed LFG selling.”

Markets take a breather

There has been a mar­gin­al gain for most cryp­to assets over the past 24 hours as the total mar­ket cap added 2.8% to reach $1.36 tril­lion accord­ing to CoinGecko. How­ev­er, the pain may not be over just yet and the longer-term trend is def­i­nite­ly downwards.

The tem­po­rary breather could be a sign of a minor accu­mu­la­tion peri­od but as in pre­vi­ous cycles, bear mar­kets are usu­al­ly drawn out over a year or two.

Total mar­ket cap­i­tal­iza­tion is cur­rent­ly 56% down from its $3 tril­lion peak in Nov, so a final capit­u­la­tion wick and a longer peri­od of con­sol­i­da­tion could still be on the cards.

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