Despite the fact that it was considered to potentially act as rally fuel, major US-based digital asset manager Grayscale Investments loaded up thousands of Bitcoin (BTC) to its Grayscale Bitcoin Trust (GBTC) – but the number one’s crypto price kept rolling in its now usual limit.
Grayscale investments BTC holdings increased by BTC 16,240, going from BTC 616,560 to BTC 632,800 (USD 23,5bn) yesterday, as claimed by bybt.com. Per the current price of bitcoin, this would mean they have added nearly USD 602.5m.
The company paid USD 36,280 a piece or 589.2m in total. Total Bitcoin (BTC) trading volume on exchanges tracked by Coingecko.com reached almost USD 51bn yesterday.
Despite the fact that bitcoin hardly moved. At 14:53 UTC on Tuesday, Bitcoin is trading at USD 37,073 and is up by almost 2% in a day and 11% in a week. Actually, for the majority of the past seven days, it’s been trading within the USD 34,500 – USD 37,500 range – a change still undisturbed by the Grayscale purchase.
“While BTC is consolidating, Grayscale doesn’t stop grabbing all the BTC they can get,” commented via tweet Crypto-TA.nl founder Crypto Ed.
He also added that,
“Past 24hrs they added another 16k BTC to their holdings. The largest 24hrs increase in past 7 months and there are still people bearish.”
As was reported just yesterday, the strategists at major investment bank JPMorgan stated that BTC’s price could drop further or break above the relevant USD 40,000 level again, and the outlook could be determined by the pattern of demand for BTC futures and the Grayscale Bitcoin Trust. For the breakout to happen, the flow into the Trust would likely need to sustain the 100m a day pace over the coming days and weeks, they said.
The absence of price reaction to the smart money coming in appears to have confused quite a few Cryptoverse residents, with several offering ideas as to why this may have been the case.
Crypto trader Loma tweeted that “either they bought the top or most of y’all wrong and this bull cycle isn’t anywhere close to being done,” continuing, “I’m gonna side with GrayScale on this one.”
Redditors have also shared a few theories: ‘Shushani’, for example, suggested that the purchase was done over the counter (OTC) alternatively of through exchanges and that the company bought it straight from whales or miners, with ‘simplelifestyle’ continuing “weak hands, newbies, bears, shorters, day-traders, gamblers and speculators” to the potential sellers.
While ‘Jayfree138’ somewhat agreed, they continued that folks have also been selling to lock in gains and pay their monthly expenses. Meanwhile, ‘Illewsor’ suggested that when buying OTC “the supply shock lags quite a bit before being reflected in the price.”
Meantime, well-known crypto research and analyst Willy Woo stated that the consolidation is healthy and that shaking out weak hands and fear-of-missing-out (FOMO) buyers is a beneficial thing, as is the recently much-discussed tether (USDT) FUD (fear, uncertainty, doubt).
What is also striking across the Cryptoverse is how many commenters communicated their discomfort that one entity owns so much BTC.
Also, as claimed by the recent Coin Metrics‘ State of the Network Report, BTC’s 7-day average Spent Output Profit Ratio (SOPR) had advanced 1.05 on January 9, a level that normally signals an incoming correction – and one followed a day later, with BTC dropping from the USD 41,000 level to the USD 31,000 level. “SOPR has since recovered to about 1.017, a healthier range,” they said. High SOPR signals that a lot of BTC is being sold for a profit and that a decline is coming; a low SOPR signals that holders are selling at a loss, indicating a good time to buy; and a SOPR of 1 signals the tipping point from selling in profit to selling at a loss.
Moreover, per a Bank of America (BofA) monthly fund manager survey, investors with USD 561bn combined stated that long bitcoin was the most congested trade in January, passing a long position on technology companies, for the first time since 2017, reported Bloomberg. These investors see indications that long positions in BTC are “reaching unprecedented levels, while retail traders and institutional names join the crypto boom.”
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