BTC is showing short term bearish move, Institutionals are still buying

This week bitcoin was following a downtrend, on Thursday it almost erased its earlier weeks’ gains. But despite the short-term bearish sentiment and volatility, institutions are still buying the BTC according to on-chain data.

Glassnode, and on-chain data site shows that the number of addresses with 1,000 or more bitcoin who are called “whales” continued to increase this week while bitcoin’s price dropped, dipping below $30,000 on Thursday. The count of such addresses dropped in late December and has spiked again since the beginning of 2021.

Also Read: SAFU Meaning in Crypto

According to a South-Korea based blockchain analytics firm CryptoQuant, the number of total bitcoins transactions remained high. But the ratio of bitcoin transfers involving all exchanges to all bitcoins transfers network-wide has not gone up, indicating that most transactions were done through over-the-counter (OTC) deals, which is used by institutional investors.

MicroStrategy announced that it bought 314 more bitcoin for $10 million during the recent market dip on Friday.
Ki-Young Jun, chief executive at CryptoQuant said, “Only 7% of network transactions are used for exchange deposits and withdrawals,” and also said, “93% of transactions in the Bitcoin network is used for non-exchange transactions like OTC deals.”

This buying-the-dip strategy by institutional investors like, MicroStrategy is very common. In the year 2020 also, a fourth-quarter market report from OKEx Insights, the research arm of crypto derivatives exchange OKEx, shows that institutional investors did not take the “the-wait-and-see” approach when prices were experiencing high volatility.

From September 2019, the market had witnessed a 45% spike in chain transactions of 1000 or more bitcoins and which remained up to a 5% high till June 2020, according to the OKEx Insights report.

The report stated, “Institutional investors really piled into the bitcoin space after Paul Tudor Jones announced his entrance, and they didn’t stop as 2020 came to a close,” and further added, “Additionally, we can assume that institutions were on the bidding end of the spectrum and buying large amounts of BTC – as opposed to selling – since the price of the leading cryptocurrency rose in a parabolic fashion throughout Q4 2020.”

OKEx Insights Senior Editor Adam James feels that The recent price volatility is due to “over-leveraged” speculative traders and retail investors who found themselves “weak-handed.”

Also Read: LAMBO Meaning In Crypto

James further said, There is little reason to assume institutional interest in the bitcoin space will suddenly disappear in 2021,” noting MicroStrategy’s new bitcoin purchase and BlackRock’s interest in bitcoin futures. “Because institutional investors tend to have longer time frames in mind when investing, they are unlikely to be phased by January’s price decrease and potentially happy to make investments at lower prices.”

Bitcoin was trading at $32950 on 23 January.