23 April, 2024

Institutions Bet on BTC as Analyst Decode Exchange Activities

29 Aug, 2023

21 Nov, 2023

  • CryptoQuant’s analysis reveals a significant shift in Bitcoin reserves.
  • Institutional activity surges as evidence suggests major Bitcoin withdrawals from exchanges.
  • The futures market and centralized exchanges show heightened volatility and dynamics.

A recent report from CryptoQuant on the X platform delves into the intricacies of Bitcoin’s financial ecosystem, uncovering a pattern that long-term investors might find intriguing. The “Supply in Profit (%)” indicator is central to this investigation, which has proven remarkably prescient at signalling optimal buying opportunities for Bitcoin. 

Historically, every dip below the 50% mark has been an opportune moment for savvy investors. Per the report, instances like these were seen when Bitcoin was valued at $290 in 2014/15, under $4,000 in 2019/20, and below $20,000 in 2022.

Yet, as the dynamics of the crypto market evolve, so do the determinants that impact Bitcoin’s value and availability. One of the most notable trends over the past year is the shifting of Bitcoin reserves across centralized exchanges. 

According to another CryptoQuant thread, non-US platforms like Binance, OKX, and Bitfinex saw a surge, with reserves increasing by over 10%. In contrast, US-centric exchanges like Coinbase, Gemini, and Kraken witnessed a steep decline in their Bitcoin reserves, plummeting between 30% to 50%.

CryptoQuant’s data suggests that institutions are not just passively observing the Bitcoin rally but are active participants. For instance, a whopping 20,000 Bitcoins, about a quarter of its total, were withdrawn from Gemini in August 2023. A deeper probe revealed that substantial amounts, like the 27.7K Bitcoins from Gemini, were transferred to specific wallet addresses, indicating potential institutional aggregation.

Additionally, the futures market is witnessing increased activity. Bitcoin’s Open Interest hit an all-time high, surpassing records set in November 2022. However, August 2023 also marked a significant correction, reminiscent of the repercussions after the FTX collapse in November 2022, showcasing the volatility and high-risk nature of the futures domain.

Indicators like “Supply in Profit (%)” provide invaluable insights for long-term investors. However, the ever-evolving dynamics of centralized exchanges and increasing institutional involvement further underscore the importance of vigilant market monitoring.



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