Bitcoin continued to test the $23k range with its first back-to-back drop since the start of the year. The flagship cryptocurrency dropped over 3% in less than 24 hours in tandem with other assets.
BTC is trading at $22,684, down by 2% in the past 24 hours, at the time of writing this post.
The coin’s sideways movement, according to a report by Bloomberg, follows Microsoft Corp.’s disappointing sales estimate, which lowered overall investor sentiment.
A similar sentiment was echoed by Tony Sycamore, a market analyst at IG Australia Pty who pointed out the strong correlation between crypto and technology stocks.
“With risk assets, it’s almost been like trying to hold a ball underwater so far this year,” he said. “The market is now having second thoughts about how much further to push them.”
Another expert Hayden Hughes, chief executive officer of social-trading platform Alpha Impact too spoke on the change stating the following,
“Prices began to reverse themselves as hedge funds re-entered short positions after taking the weekend off.”
That being said, BTC’s recent price rebound has fueled hope that the coin is primed for $25k by March, based on a mix of bullish technical and macro indicators. But a recent analysis hinted the rally might not be sustained.
Bitcoin: Large-Scale Investors Remain Calm So Far
Bitcoin has surged 30% above $20,000 in 2023 so far, but according to on-chain data, the buying trend lacks support from institutional investors.
Per CryptoQuant’s Fund Holdings index, the total amount of Bitcoin held by digital assets holdings such as trusts, exchange-traded funds, etc has been dwindling during the coin’s price increase in recent months.
Moreover, when compared between the parameters for Tokens Transferred and Fund Flow Ratio from CryptoQuant, no unexpected transactions occurred on-chain but rather on cryptocurrency exchanges.
The Fund Flow Ratio measures the proportion of coin transfers involving the exchange to all coin transfers across the network, whilst the Token Transferred indicator indicates the total quantity of coins transferred during a certain period of time.
“Usually at the bottom, institutional investors want to buy quietly through OTC trading,” noted market analyst MAC_D, adding:
“This trading was simply actively traded only on the exchange, and no unusual transactions occurred on the on-chain. […] The current institutional investors have remained calm and just watching. OTC trading will be brisk when they expect a full-fledged uptrend turn.”