Bitcoin’s price has been volatile over the past month, ending with a total loss of 3.09% according to data from CoinMarketCap. Interestingly, despite periodic price increases, the cryptocurrency market leader failed to regain the $65,000 price zone throughout August. However,Amid the bear market, institutional investors seized the opportunity to strengthen their position in the Bitcoin market.
Bitcoin OTC reserves rise to record highs in 2021
IN Quick post at CryptoQuant, an analyst with the username caueconomy reported an observation regarding the buying behavior of institutional Bitcoin investors. Monitoring transactions on over-the-counter (OTC) Bitcoin addresses, the analyst found that these sites have been rapidly increasing their holdings over the past few weeks.
Institutional investors often prefer OTC trading over exchanges for immense transactions because it allows them to buy or sell immense amounts of cryptocurrencies without significantly affecting the market price. According to caueconomy, these investors have purchased 57,000 BTC worth $3.65 billion in the last 30 days, the largest amount of buying last seen in 2021.
The analyst notes that such buying activity is unusual as high levels of institutional OTC trading typically occur during periods of high volatility, in contrast to the low price volatility that has largely prevailed in the BTC market over the past few weeks.
However, caueconomy assumes that this large-scale acquisition may be aimed at a planned token offload in the event of a “negative” market reaction. In contrast, the purchase of immense amounts of assets by whales and institutional investors, especially during periods of market declines, is a bullish signal of confidence in future profitability.
The major cryptocurrency recently experienced a price rally on Friday after US Federal Reserve Chairman Jerome Powell confirmed upcoming interest rate cuts in the next few months. Bitcoin rose 4.84% to a peak of $64,879, just below the noticeable resistance zone of $65,000.
Commenting on the development, Uto Shinohara, a financial expert and managing director of asset investment firm Mesirow, Planned a 30bp rate cut in September and a total rate cut of 95-100bp by the end of 2024. If these predictions prove to be true, demand for Bitcoin and other cryptocurrencies is expected to raise in the coming months, which could translate into significant gains for institutional investors.
BTC Price Overview
According to data from CoinMarketCap, Bitcoin is trading at $63,905, up 5.38% in the past 24 hours. At the same time, the asset’s daily trading volume increased by 64.53%, valued at $42.94 billion.
Featured image from Coinformania, chart from Tradingview
