Analysis suggests that institutional Bitcoin investors are “buying the dip” while BTC prices are hitting multi-month lows.
On-chain analytics platform CryptoQuant reported in one of its Quicktake blog posts on July 11 that 100,000 new Bitcoin (BTC) were bought in just one week.
Bitcoin institutional buying: $5.7 billion in one week
Bitcoin institutional investors aren’t just buying, they’re buying with more confidence than when BTC/USD was trading near all-time highs.
This is the conclusion of CryptoQuant contributor Cauê Oliveira, who analyzed the changes in wallet balances of institutions holding between 1,000 and 10,000 BTC this week.
These institutions, reflecting the institutional aspect of Bitcoin’s investor base, have been rapidly increasing their exposure since early June. Since then, BTC/USD has fallen by as much as 23%.
Even as Bitcoin hit its lowest level since late February last week, buying continued, with total volume increasing by over 100,000 BTC ($5.7 billion).
“While many novice investors capitulated last week, particularly those who bought 1-3 months ago, institutional investors have seen the largest accumulation since March,” Oliveira summarized.
In terms of 30-day rolling balance changes, this jump coincides with the peak inflows to US-based spot Bitcoin exchange-traded funds (ETFs) in March. However, this time around, ETF inflows are relatively cool, so BTC’s destinations are elsewhere.
“While this was more of a fundraising-related demand than what we saw in March, the current institutional accumulation could represent a genuine process of ‘buying the dip’ by large players,” Oliveira concluded.
Daily inflows in March were over $1 billion, but the current daily figures are much lower: on July 11, they were around $79 million, according to data from sources including UK-based investment firm Farside Investors, and on July 8, they hit a monthly high of $294 million.
Convictions Continue Despite BTC Price Drop
As Cointelegraph reported, another group of Bitcoin holders are facing a battle of wills as they hold significant funds in the “deficit.”
Related: Bitcoin Price CPI Rise Lasts Only 1 Hour as Mt. Gox Selloff Concerns Continue
Short-term holders, including new whales, saw unrealized losses of up to 17% during last week’s surge to $53,500.
According to calculations by on-chain analytics firm Glassnode, the total cost basis of the short-term investor base that holds a specific BTC unit for up to 155 days is over $64,000.
Cointelegraph previously noted that overall cryptocurrency market sentiment remains gloomy, with the Crypto Fear & Greed Index dropping to “extreme fear” for the first time since January.
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