Buying the dip? Bitcoin institutional investors add 100K BTC in a week
2024.07.12 07:13
Bitcoin (BTC) institutional investors are “buying the dip” while BTC price action circles multi-month lows, analysis says.
In one of its Quicktake blog posts on July 11, on-chain analytics platform CryptoQuant revealed 100,000 BTC in new purchases in just one week.
Bitcoin institutional buying: One week, $5.7 billion
Bitcoin institutional investors are not only buying, but doing so with more conviction than when BTC/USD traded near all-time highs.
That is the conclusion of CryptoQuant contributor Cauê Oliveira, who this week analyzed the change in wallet balance of entities between 1,000 and 10,000 BTC.
These entities, who reflect the institutional side of the Bitcoin investor base, have upped their exposure at a rapid pace since the start of June. Since then, BTC/USD has fallen by up to 23%.
Even last week, when Bitcoin hit its lowest levels since late February, the buying continued, with the total increase passing 100,000 BTC ($5.7 billion).
“While many novice investors capitulated last week, with special emphasis on coins purchased between 1 and 3 months ago, institutional players made the largest accumulation process since March,” Oliveira summarized.
Bitcoin large holder balance data (screenshot). Source: CryptoQuant
In terms of 30-day rolling balance change, the jump matches that seen during the height of the inflows to the United States spot Bitcoin exchange-traded funds (ETFs) in March. This time, however, with ETF inflows comparatively cool, the destination for the BTC lies elsewhere.
“This means that, unlike what was seen in March, which was a demand more linked to fundraising, the current institutional accumulation may indicate a true process of ‘buying the dip’ in large players,” Oliveira concluded.
While March’s daily inflows topped $1 billion, the current day-to-day numbers are far smaller. Data from sources, including United Kingdom-based investment firm Farside Investors, shows around $79 million for July 11, while July 8 saw $294 million — the highest tally in a month.
US spot Bitcoin ETF netflows (screenshot). Source: Farside Investors
Conviction outlasts the BTC price dip
As Cointelegraph reported, other cohorts of Bitcoin hodlers face a battle of willpower as they hold significant funds “in the red.”
Related: Bitcoin price CPI gains last just 1 hour as Mt. Gox sell-off fears linger
Short-term holders, including newcomer whales, faced 17% in unrealized losses during last week’s trip to $53,500.
The aggregate cost basis of the short-term holder investor base, defined as entities hodling a given unit of BTC for up to 155 days, sits above $64,000, per calculations from on-chain analytics firm Glassnode.
BTC/USD chart with short-term holder cost basis. Source: Glassnode
Earlier, Cointelegraph noted that overall crypto market sentiment remains gloomy, with the Crypto Fear & Greed Index dropping back to “extreme fear” for the first time since January.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
