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Coinbase saw a huge spike in buyer activity today as Bitcoin (BTC) hit $ 33,150. According to analysts, this trend is reminiscent of MicroStrategy’s Bitcoin accumulation, potentially backed by institutional buy orders. Thanks to this push BTC has exceeded $ 33,000, reaching a new historical record.
Coinbase Buyers Made Bitcoin Rebound
Over the past 48 hours, Coinbase has posted a higher price than Binance. At a certain point, the value of BTC on the exchange surpassed that of Binance by $ 100.
When Bitcoin crossed $ 30,000, the surcharge peaked at $ 350– In other words, when Bitcoin hit $ 30,000 on Binance, it cost $ 30,350 on Coinbase.
Before the hike, CryptoQuant CEO, Ki Young Ju, had warned that few Coinbase exits posed a risk to the price of Bitcoin. In his opinion, the exits should increase to allow BTC to find new momentum. Shortly before the rally, has explained:
“Coinbase has not seen significant outflows since the price hit $ 23,000, the transferred tokens are falling, and the fund flow rate is increasing for all exchanges. Institutional investors may still be on the scene shortly, but we could face a correction if this continues. “
As Bitcoin hovered around $ 29,500, Coinbase outflows began to surge. As Ki pointed out, this could be due to over-the-counter (OTC) trading, which is typically bullish for BTC and exemplifies the broader trend of depleting BTC reserves on exchanges:
“As we continue to ramp up, another 34,000 BTC have left the exchanges in the last few blocks very nonchalantly.”
While we were pumping another 34K btc casually pulled from the exchange in the last few blocks pic.twitter.com/8r20JnOGaj
– // Bitcoin ack (@BTC_JackSparrow) January 2, 2021
High net worth buyers use the OTC market to buy or sell large amounts of Bitcoin. Therefore, when signs of OTC trading emerged, Ki highlighted them as positive factors for BTC. Just two days after the exit peak, BTC surpassed $ 30,000, hitting a record high of $ 33,150.. Before the recent milestone, Ki noted:
“$ 12,063 BTC just came out of #Coinbase. They came in multiple cold wallets. Possible OTC transactions. Getting the $ 30,000 will be difficult, but the institutions don’t care. They just buy more. “
Why is BTC becoming so attractive?
According to Ashwath Balakrishnan, an analyst at Delphi Digital, Bitcoin has become more interesting after surpassing its previous all-time high.
When the price of Bitcoin hovered around $ 4,000, the risk of a significant drop was high, combined with significant uncertainty regarding the medium-term outlook for BTC.
Unlike, when Bitcoin hit $ 20,000, the leading cryptocurrency became more attractive to investors. Balakrishnan has explained:
“From a risk perspective, buying $ BTC post-ATH is actually a better strategy than trying to hit the low. If you bought for $ 20,000, you made 50% with minimal friction. Buyers at the ~ $ 4,000 minimum won nearly 8 times, but their risk of losing it was much higher. “
In the short term, many believe that the price of Bitcoin could be further driven by institutions that did not buy BTC in December due to possible accounting problems.
Therefore, some analysts argue that in the first quarter of 2021 other institutions could invest in Bitcoin. This scenario, which will become apparent by looking at Grayscale’s asset management figures and the open interest from CME’s Bitcoin futures market, is likely to trigger a further rally in BTC.
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