Those looking to shorten the ongoing bull run will have to think twice, according to on-chain analyst Kim-Young Ju.
The executive director of CryptoQuant, a data analytics company, said in a tweet Thursday that traders have no reason to place bets on Bitcoin’s possible decline. He stated that institutional investors are buying the cryptocurrency despite the short-term downward revision from its record high of $ 24,300 to local lows.
Mr. Ju highlighted this with a so-called “Coinbase Pro Outflow” indicator. The metric measures the amount of Bitcoin that is transferred from the wallets of the US exchange. He noted two cases where the drainage rate increased. At that point, the cost of buying a Bitcoin was well over $ 23,000. Mr. Ju said:
“The most important factor now is institutional investors. Firmly [over-the-counter] According to the on-chain metrics, business is still going and the Coinbase outflow hit 24,000 BTC yesterday.”
Bitcoin's Outflow from Coinbase Pro trading platform. Source: CryptoQuant
In simple terms, the arrival of institutional capital in the Bitcoin market, especially when the cryptocurrency is trading above $ 23,000, increases the level’s potential to act as strong support. Mr. Ju noted that traders would be at risk of extreme losses if they attempted to trade against the institutional bets i.e. H. If they increased their short positions below $ 23,000 with a majority long outlook.
The analyst was one of the first to spot Coinbase Pro Outflow in some cold wallets on December 18, just six days before Bitcoin hit a record high. Assuming the trading platform is doing OTC trades, he added that the recipient wallets are actually custody wallets.
“As I said, it was about wallets that looked like custody. It seems that after the OTC deal for institutes, Coinbase is making a new wallet for each customer. “
Coinbase Pro is sending a massive amount of BTC to individual wallets. Source: Kim-Young Ju
As the Coinbase Pro outflow keeps getting higher, it signals another upward trend in the Bitcoin market.
“I’m very optimistic about BTC,” said Ju.
Meanwhile, Alex Mashinsky, the founder of Celsius Network, has an opposite outlook on the Bitcoin market. The analyst noted that traders should not open new long positions or buy BTC based on a short-term movement in supply and demand.
“Be careful,” warned Mr. Mashinsky. “80% of the last 8 billion US dollars in new shades of gray The contributions are in kind and a large part of it with 2-4 times leverage. When the funds are sold we will be back to the $ 16,000 level. GBTC sales of approximately $ 4 billion will be made over the next three months. “