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Will Institutions Continue to Pull the Weight for Bitcoin Price Rally?

  • The range-bound of Bitcoin’s price rally has left many traders waiting for another dip. While there have been swift recoveries in the current market cycle and institutions with large Bitcoin holdings have supported the rebound in price, the question that has continued to plague is for how long?

Grayscale, the largest digital asset manager in the world, had the premium on Bitcoin drop below 10% and this is alarming for retail traders. It signals a pause towards the much-awaited reversal from institutional buyers. However, it is expected that once the demand levels for the flagship cryptocurrency is revived, the premium will be back above 10%. Sadly, current data shows that there is a likelihood of drop in demand.

Over the past week, Bitcoin price lost approximately 10% of its value, following a drop from the $37K – $38K price area. Looking at the price action over the last few days, it looks like $30,000 is the current baseline of a bearish triangle that Bitcoin is currently trading. At 5:23 PM GMT, the price of one Bitcoin is trading at $31,870.

data from skew for institutional buyers

Data from Skew Chart show the premium GBTC dropped from a height of 40% to less than 10% in less than a month. With this, miners are alarmed. Traders and whales may also feel pressured to sell. Before the current dip, the premium ranges from 20% to 40% for nearly 2 months. Grayscale added 3544 BTC, or $118 million, in the last 24 hours. Since the last 7 days, Grayscale has added 29,598 Bitcoin worth $1 Billion. This trend may take a pause if the selling pressure continues to increase.

Price support and resistance level to watch

Key Support Levels: $32,000, $30,760, $30,000, $29,630, $29,000.

Key Resistance Levels: $33,110, $33,750, $35,000, $35,800 – $36K.

To look forward, it appears that the first level of support lies in the lower boundary of the 4-hour chart’s symmetrical triangle around $32,000. This is closely followed by $30,760, 30,000, and 29,630.

What should be expected are support levels around $29,000 to $26,000.

The resistance levels are around $33,110 (bearish .5 Fib), along with the upper angle of the symmetrical triangle on the following 4-hour’s chart.

Bearish momentum continues

From the resistance and support levels, it appears that the bearish momentum tried to fade but continued because the bullish momentum was not strong enough to take control of the market.

Since hitting the new ATH, momentum and volatility have both dropped for Bitcoin. The momentum is currently at 33% in the Bitcoin-USD market. Volatility for altcoins have continued to increase significantly leading to price recoveries and lost market capitalization.

While institutional movements may not be sufficient to trigger a bullish rally, it supported Bitcoin price to a new ATH. If the dip continues, institutions may change their investment flow into assets with higher returns with a shorter time frame, than focus on long game trading like Bitcoin trading.

If you have any questions and comments on Bitcoin today, use the form below to reply.

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