Despite the acceleration of institutional purchases in the cryptocurrency market, overall bitcoin demand appears to still be weak. Despite the enthusiastic ETF purchases and the steady accumulation of large companies in recent weeks, the number of sellers in the market has increased. According to CryptoQuant’s weekly report, there was a net sale of 63 thousand BTC in the market in the 30-day period as of March.
Institutional demand and trends of large investors
While ETFs reached a record level with the purchase of approximately 50 thousand BTC in the last 30 days, the accumulation of approximately 44 thousand BTC in the Strategy company’s portfolio remained constant during the same period. Thus, it was seen that the two main corporate channels together purchased 94 thousand BTC in March.
However, despite this volume, retail investors, large accounts, miners and funds defined as “whales” that have been in the market for a long time sold approximately 157 thousand BTC. This situation shows that corporate purchases are insufficient to meet the intense sales pressure in the market.
A year ago, large wallets with balances between one thousand and ten thousand BTC increased their total portfolio by 200 thousand BTC. Today, investors in the same segment have reduced a total of 188 thousand BTC in the last 18 months, marking one of the fastest and strongest sales periods in history.
Price movements and market psychology
Bitcoin’s current price in the $67,000 to $68,000 range is 21 percent above the network-wide average cost of $54,286. In past cycles, when the price fell below this “realized price” level, it indicated that the market had bottomed. This is not the case at the moment, but it is noted that this range is gradually narrowing. In the last 15 months, the premium between price and realized price has decreased from 120 percent to 21 percent.
The “Fear and Greed” index, which measures market sentiment, has remained in the extreme fear zone, remaining between 8 and 14 in the last month. By contrast, bitcoin ETFs saw inflows exceeding $1 billion in March.
Jason Fernandes, co-founder and market analyst of AdLunam, said, “The fact that Bitcoin’s withdrawals are stuck at 50 percent levels is an indicator of maturity in the market,” and stated that institutional participation and deepening liquidity reduce volatility in two ways.
Bitcoin price on US-based exchanges has recently started to be traded at a discount compared to other exchanges. In particular, the fact that the Coinbase Premium Index remained in the negative zone indicated that the American investor did not return to the market at high prices.
Geopolitical developments also cause fluctuations in the price of bitcoin. In the last five weeks, it has been observed that the price fluctuated between 65,000 and 73,000 dollars during the tension with Iran, and depending on the news flow, investors preferred to stay on the sidelines instead of taking positions.
Morgan Stanley received approval this week for a bitcoin ETF with a fee well below the market average. This new product was made available to 16 thousand financial advisors responsible for the management of $6.2 trillion and created a channel for them to make direct ETF investments. Additionally, Strategy company’s preferred stock product has also seen hundreds of millions of dollars in inflows recently.
The CryptoQuant report mentions the possibility of the price jumping to the $ 71,500-81,200 range if tensions with Iran ease. However, in the general picture, the weakening in demand is noteworthy and it is emphasized that maintaining the current price level depends entirely on how much ETFs and new investor channels can absorb the pressure on the sell side.
