Bitcoin Sell-Off Attracting More Investors
With Bitcoin (BTC) correcting from its recent all-time high to just above $45,000, it’s led many to wonder where the sell-off will take us next. And while some Bitcoin investors take profits, and weak hands are shaken out institutional investors are clearly buying the dip.
After a new all-time high earlier this week of $58,172, a 15% Bitcoin sell-off ensued, and the BTC price has been bouncing between $46-50k since, as Bitcoin traders look for signals.
But the correction is following a global downfall as investors take profits from all markets, according to eToro analyst Simon Peters.
‘The sell-off is part of a global downfall. Today’s correction for crypto assets is part of a wider sell-off in markets globally,’ Peters wrote in his investor’s newsletter, but the analyst confirmed the sell-off was attracting new Bitcoin investors.
‘Being driven by profit-taking. Investors are closing positions, which will have generated significant gains for many of them,’ the eToro analyst continued. ‘However, as positions are being closed and prices fall, eToro data shows even more new investors are coming on stream for the first time and buying Bitcoin, with 26% more opened positions than closed ones in the last seven days (to Monday).’
Peters warned of short-term volatility, due to liquidations, but said the correction will attract more long term investors, which should lead to -great potential’ as we move throughout the year.
‘The sell-off will attract more investors long-term,’ said Peters. ‘However, in the short-term some we will see some volatility, as we are today. We still see great potential for bitcoin and peers as we move through the year.’
Institutional Investors Are Buying The Dip
While the Bitcoin sell-off has shaken off weaken hands and leveraged positions, institutions are clearly buying the dip.
Leading cryptocurrency exchange Coinbase, a favourite for institutional investors, saw 13,000 BTC withdrawn from its trading platform and into cold storage custody wallets.
The bitcoins, worth an estimate $650 million, were withdrawn to ‘multiple Coinbase custody wallets,’ according to CryptoQuant CEO Ki Young Ju.
‘13k $BTC flowed out from Coinbase a few hours ago,’ said the CryptoQuant CEO. ‘It seems those BTC went to multiple Coinbase custody wallets. US institutional investors are still buying Bitcoin at the 48k price. This is the strongest bullish signal I’ve ever seen.’
Coinbase custody wallets are linked to the platform’s over-the-counter (OTC) desk, a preferred method for institutional investors, who try to avoid moving the market.
Any outflows from Coinbase trading platform into cold storage custody wallets, therefore, is regarded as a clear signal of institutional activity.