The price of Bitcoin (BTC) fell more than 50% after hitting a high of $69,000 six months ago, but the drop did not force some of its wealthiest investors to sell.
Specifically, Coinbase’s number of Bitcoin in custody for institutional clients increased by 296% since Q4 2020, showing that most investors decided to “hodl” their investments even though the price of BTC had dropped further 50% from its all-time highs.
JUST IN: #bitcoin under @Coinbase Custody for institutional clients increased by 296% since Q4’20. pic.twitter.com/iILge2Cane
— CryptoQuant.com (@cryptoquant_com) May 30, 2022
For example, institutions that deposited 10,939 BTC (~$335 million at May 31 price) to Coinbase Custody in December 2020, when the BTC/USD pair was hovering around $23,000, have not moved since, according to show CryptoQuant’s on-chain data.
Ki Young Ju, CEO of CryptoQuant, noted:
“For the most part, the same amount of BTC is still in (custodian) wallets, which flowed out of Coinbase for the very likely institutional purchases in December 2020.”
If this is the case, then these institutions are currently sitting on a 30% profit from their BTC investments. In the meantime, his decision not to unwind his Bitcoin positions, even as the BTC/USD pair has plunged by more than half, underscores his strong “hodling” sentiment.
This also points to the ability of institutions to withstand further declines in the price of Bitcoin, at least until it falls below investors’ breakeven level of $23,000.
Is the Bitcoin bear market not over?
Bitcoin price has been fluctuating within the $29,500-$30,500 range since May 12, underscoring market indecision in a higher interest rate environment.
But several technical analysts anticipate that the price of BTC will continue its downward trend.
For example, PostyXBT, an independent market analyst, holds that the token could drop towards its 200-week moving average (the $20,000-$22,000 range) next, as shown in the setup below.
For its part, the popular analyst Rekt Capital Add that a drop towards the 200-week MA could also cause Bitcoin to form a bearish wick, which could take its price as low as $15,500-$19,000.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. All investment and commercial movement implies a risk, you must carry out your own investigation when making a decision.
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