New Data Signals Institutional Players Are Offloading Bitcoin

Institutional investors are reportedly contributing largely to selling pressures on the negative price premium.

Negative trading pressures from institutional investors

Compared to retail investors, institutional investors do not sell or buy in small quantities. They are often recognised with big companies and often use Coinbase Pro to buy and trade bitcoin.

Starting on May 2nd, the Coinbase Price Premium began trading negative. According to data from Cryptoquant, it was observed that the weight of most Bitcoin sales was coming from investors in the traditional finance sector.

Currently, it seems that the financial markets are trading risk-off, and these investors might want to curtail their vulnerability to bitcoin. Yet again, this is proof that bitcoin prices are predominantly steered by the standards of the traditional finance market.

Ongoing movements on the Bitcoin’s Onchain

It is no news that there is always a significant amount going in and out of Bitcoin exchanges.

However, a lot went out of the cryptocurrency market as a result of massive sales of bitcoin over the week.

Meanwhile, bitcoin bulls keep facing pressure, as bitcoin prices trade lower. While this is a substantial drawback, it remains modest when compared to the extreme declines in prior bitcoin bear markets.

In comparison to the previous cycle, a significant amount of bitcoin was sold. During the sell-off week, more than $3.15 billion in value flowed in and out of exchanges, with an inflow linked to a net bias, accounting for $1.06 billion.

This demonstrated how much larger typical USD denominated capital flows across the bitcoin network.

The onchain market sustained high volatility and further downside this week, in response to the Federal Reserves hiking rates to 0.5%. Its (on-chain transactions) dominance attained the second-highest value in history. The record follows October-November’s largest aggregate related volume peak, which happened last year. 

This further buttresses the deduction that these investors intended to de-risk, sell and/or boost collateral to margin, and responding to market volatility.

The bitcoin market keeps evolving in both off-chain and on-chain transactions, and both might likely become total determinants of market velocity, price movements, and investors’ sentiments.