Over the past month, Bitcoin’s price has been subject to a lot of turbulence, resulting in a total loss of 3.09% according to data from CoinMarketCap. Notably, despite occasional waves of price growth, the crypto market leader failed to reclaim the $65,000 price zone throughout August.in the midst of this bear market, institutional investors have seized the opportunity to strengthen their position in the Bitcoin market.
Bitcoin OTC Reserves Surge to Record High Since 2021
In a Quick take-post On CryptoQuant, an analyst with the username caueconomy reported an observation about the buying behavior of institutional Bitcoin investors. By monitoring transactions from Bitcoin over-the-counter (OTC) addresses, the analyst indicated that these parties have been rapidly increasing their holdings in recent weeks.
Institutional investors often prefer OTC trading over exchanges for large transactions, as it allows them to buy or sell large amounts of cryptocurrencies without significantly affecting the market price. According to caueconomy, these investors have now acquired 57,000 BTC, worth $3.65 billion, in the past 30 days, representing a purchase size last seen in 2021.
The analyst notes that this buying activity is unusual, as much institutional OTC trading typically occurs during periods of high volatility, as opposed to the low price volatility that has largely been present in the BTC market in recent weeks.
However, Caueconomy argues that this large-scale acquisition may be aimed at planned token offload in cases of “negative” market reaction. In contrast, the purchase of large amounts of an asset by whales and institutional investors, especially during market lows, represents a bullish signal of confidence in future profitability.
Recently, the leading cryptocurrency saw a price surge on Friday after US Federal Reserve Chairman Jerome Powell confirmed an upcoming rate cut in the next few months. Bitcoin rose by 4.84% to peak at $64,879, just below the prominent resistance zone of $65,000.
Uto Shinohara, financial expert and director of a wealth investment company, Mesirow, commented on this development: predicted a 30 bps rate cut in September and a total rate cut of 95-100 bps by the end of 2024. If such predictions come true, demand for Bitcoin and other cryptocurrencies are expected to increase in the coming months, potentially resulting in significant gains for institutional investors.
BTC Price Overview
According to data from CoinMarketCap, Bitcoin is trading at $63,905 with a price gain of 5.38% in the last 24 hours. At the same time, the asset’s daily trading volume has increased by 64.53% to value it at $42.94 billion.
Main image from Coinformania, chart from Tradingview