Cryptocurrency News

Are Institutions Over the Bitcoin Digital Gold Narrative?


After two consecutive weeks of losses, bitcoin is trading at $36,786 and posting profits on the 7-day chart. On the 30-day chart, BTC is still losing 32.3%. Price action moves painlessly higher in the current range, but without confidence from bulls.

BTC is trending down on the daily chart. Source: BTCUSD Tradingview

The crypto market has stabilized after the BTC price crash. The battle has been fought by short-term holders selling their coins to long-term holders, but institutions have been mostly absent during the Reformation.

data There are suggestions from CryptoQuant that institutional demand for Grayscale Bitcoin Trust (GBTC) and a bitcoin fund launch by investment fund manager 3iQ in Canada is waning.

As seen below, GBTC has seen negative premium and is trading at a discount since March 2021. This caused inconvenience and anxiety to their customers and forced Grayscale’s parent company, Digital Currency Group, to intervene. The company had to buy several crore shares of GBTC.

bitcoin btc btcusd
Source: Cryptoquant

Unlike Canadian QBTC, GBTC holds its own bitcoin. QBTC reduced its stake to 7,980 BTC at the beginning of June. Thus, creating selling pressure in the crypto market, as seen below.

bitcoin btc btcusd
Source: Cryptoquant

The general sentiment in the market has been negative despite news of adoption by nation-states. At the beginning of the current week, btc price Saw some positive developments. This coincides with a reduction in GBTC discounts from 12% to 7%.

BTC BTCUSD
Source: Glassnode

As shown by Lex Moskowski, CIO of Moskvsky Capital, over the past 2 days, the number of BTC depositing addresses saw a leg up after a period of consolidation. However, the selling pressure has not eased, as evidenced by the increase in BTC inflows to exchanges.

bitcoin btc btcusd
Source: Glassnode via Lex Moskowski

Will the Bitcoin Bull Market Beat the Bears Back?

For the time being, the price of bitcoin may still be dominated by uncertainty and without a clear direction. According to a report from QCP Capital, the selling of BTC has been “deeper and faster” than expected.

BTC BTCUSD
Source: QCP Capital

The selloff has come in 3 waves since the beginning of May. The market may see another sell-off, but in the form of a consolidation as the firm claims:

It looks like BTC is setting up a lower level for Wave 4 rally. Although this Wave 4 is likely to be a slow steady consolidation piece.

Bitcoin faces two challenges in the near term, it must rebound from resistance to support at $38,000 and overcome the “formidable” wall of $40,000. The bitcoin thesis as a store of value appears to be invalid in the short term, as evidenced by the low institutional involvement. Therefore, the demand for cryptocurrencies is low.

(…) All three bull cases for BTC have been invalidated, and it is difficult to make an increasingly fundamental argument for buying BTC right now. We expect the downtrend to continue and for the market to rallies on a sell mode, at least in the short term, and if Wave 4 extends beyond $40k we expect a sell supply supply above $50k Huh.

QCP Capital expects the Consumer Price Index (CPI) print and the Federal Open Market Committee (FOMC) meeting to be a risk factor for the BTC price in the near term.

It was last month’s CPI print, along with a confluence of a few other factors, that started to tear the big BTC apart.

The firm sees a possibility for the price to fall below $30,000 and expects strong support at $20,000 if this scenario materialises.





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