Organizations Still Buy Bitcoin Dip, Despite Near Season Volatility: Data

Data from a data site on the Glassnode chain shows that the number of addresses with 1,000 or more bitcoin (often called “whales”) continued to rise this week while the price of bitcoin fell, dipping below $ 30,000 on Thursday. The number of such referrals dropped in late December and has picked up again since early 2021.

In addition, the total number of bitcoin transactions on the network remains high, according to data from South Korean blockchain analyst company CryptoQuant. However, the ratio of bitcoin transfers involving all exchanges to all bitcoins transfers across the network has not increased, indicating that most transactions have been made through over-the-counter (OTC) bargains, the method preferred by institutional investors.

“Only 7% of network transactions are used for exchange deposits and withdrawals,” said Ki Young Jun, chief executive of CryptoQuant, adding that “93% of transactions in the Bitcoin network are used on for transactions other than exchanges such as OTC bargains. ”

This “buy-the-dip” behavior by organizations like MicroStrategy is nothing new. A fourth-quarter market report by OKEx Insights, the crypto derivatives exchange research arm of OKEx exchange, shows that institutional investors did not take the “wait-and-see” approach when prices experienced high volatility last year.

The percentage of transactions on the chain over 1,000 bitcoin spiked to over 45% in September and remains relatively high from just over 5% at the end of June last year, according to an OKEx Insights report.

“Institutional investors really piled into the bitcoin space after Paul Tudor Jones announced his entry, and they didn’t stop as 2020 came to an end,” the report read. “In addition, we can assume that institutions are on top of offering the spectrum and buying large quantities of BTC – rather than selling – since the price of leading cryptocurrency rose in a parabolic way throughout Q4 2020.”

The recent price volatility is a result of “over-leverage” speculative traders and “heavyweight” retail investors, according to OKEx Insights’ Senior Editor Adam James.

“There is little reason to assume that institutional interest in the bitcoin space will suddenly disappear in 2021,” said James, citing MicroStrategy’s new bitcoin purchase and BlackRock’s interest in bitcoin’s future. “Because institutional investors tend to have longer time frames in mind when investing, they are unlikely to be scaled down by the January price fall and possibly happy to make investments at lower prices.”

At press time, the price of bitcoin was trading at $ 33,308.06, up 4.56% in the last 24 hours, according to the CoinDesk BPI.