Recent data suggests a potential shift in Bitcoin ownership trends. Institutional investors, often regarded as market trendsetters, might have completed their Bitcoin acquisition spree as early as last year.
The Silent Markets Over the Weekend
This past weekend, a palpable lull took over the cryptocurrency markets, continuing its ongoing consolidation phase. Such periods often result in heightened speculation regarding the driving forces behind the market’s behavior.
CryptoQuant, a prominent on-chain analytics firm, sheds light on this speculation with intriguing updates on August 14. The firm’s close monitoring of Bitcoin’s transactional landscape painted a clear picture.
Drawing from their data, analysts hinted that the culmination of institutional Bitcoin buying might coincide with two substantial market crashes in 2022. The first being the Terra/Luna ecosystem’s dip in May, followed by FTX’s downturn in November.
Bitcoin Whale Transactions: Aligning with Market Lows
The ‘token transferred’ metric, which tracks large-scale Bitcoin transfers, indicated that these whale transactions predominantly transpired at or near the lowest points in market cycles.
Interestingly, as Bitcoin’s value surged since its last trough in November 2022, there was a conspicuous absence of these sizable over-the-counter (OTC) trades. This absence aligns with the hypothesis that institutional players have wrapped up their Bitcoin purchases, rendering additional large-scale trades redundant.
Notably, one of the highest recorded trading volumes occurred shortly after Luna’s crash in mid-June 2022.
Understanding Bitcoin’s Velocity
Bitcoin’s velocity patterns further affirm the assumption of heavy trading and accumulation a year back. However, this metric’s marked decline has been since the peak of institutional accumulation in mid-2022.
Concluding their analysis, CryptoQuant proposes an optimistic outlook. They highlight the $15,700 mark—established post the massive institutional buy—as the probable lowest point in this cycle. If metrics such as ‘Token Transferred’ and ‘Velocity Speed’ rise in tandem with price hikes in the future, the market might well be on the cusp of a bullish surge.
The recent quietude in market activity could be the proverbial calm before the storm, heralding an impending upward swing in Bitcoin’s trajectory.
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