Coinbase saw a huge increase in copper activity overnight as the price of Bitcoin (BTC) exceeded $ 32,500 on January 2nd. Analysts believe the trend is reminiscent of the accumulation of MicroStrategy’s Bitcoin, possibly fueled by institutional buying orders. As a result, BTC exceeded $ 31,000 and reached a new high.
Coinbase buyers were the catalyst for the Bitcoin rally
Over the past 48 hours, Coinbase has consistently seen a high premium compared to Binance. At one point, Bitcoin was $ 100 more expensive on the stock market than on Binance.
When the price of Bitcoin exceeded $ 30,000, the premium reached as high as $ 350. For example, when Bitcoin traded at $ 30,000 on Binance, BTC was priced at $ 30,350 on Coinbase.
Prior to the rally, CryptoQuant CEO Ki Young Ju said low outflows from Coinbase posed a risk to Bitcoin’s protests. He said the outflow should increase for BTC to find new momentum, which it did. He said before the rally:
‘We have had no significant outflow of Coinbase since $ 23 thousand, the tokens transferred are declining and the fund flow ratio for all exchanges is increasing. It is still possible that institutional investors will join soon, but we may get a fix if this continues. ‘
As Bitcoin approached $ 29,500, the outflow of Coinbase began to increase. Ki said it is possible OTC transactions (OTC) are possible, which is typically strong for BTC and is a bigger example of shrinking BTC reserves on exchanges.
While we were pumping, another 34K btc took the last few blocks down casually pic.twitter.com/8r20JnOGaj
– // Bitcoin ack (@BTC_JackSparrow) 2 January 2021
Buyers with high value use the OTC market to buy or sell large quantities of Bitcoin. When the signs of OTC transactions emerged, Ki said it was positive for BTC. Just two days after the outflow rose, BTC rose past $ 30,000 and reached $ 31,400. Ki remarked before BTC broke $ 30,000:
“12063 $ BTC has just flowed out of #Coinbase. It went to several cold wallets. Possible OTC transactions. Breaking 30k is going to be difficult, but institutions do not care. They just buy it more. ”
Why does BTC become so attractive?
According to Ashwath Balakrishnan, an analyst at Delphi Digital, Bitcoin became more compelling when it surpassed its everyday high.
When the price of Bitcoin fell to around $ 4,000, the risk of a significant downside was high, combined with great uncertainty surrounding the outlook for BTC in the medium term.
So when Bitcoin rose more than $ 20,000, the dominant cryptocurrency became more convincing for investors. He said:
‘Buying $ BTC after ATH is actually better than cutting off the bottom of a risk-adjusted lens. If you bought at $ 20,000, you are 50% higher, with minimal friction between bottom-bottom buyers. on was much higher. ”
In the short term, a popular narrative that could drive the Bitcoin price higher is the prediction that institutions might not have bought BTC in December due to potential accounting problems.
As such, some analysts say more institutions could jump into Bitcoin in the first quarter of 2021. If that happens, as evidenced by Grayscale’s assets being managed and the open interest of the CME Bitcoin futures market, it’s likely to cause a broader BTC rally. .