Coinbase saw a massive spike in buyer activity overnight as bitcoin’s price soared (BTC) Exceeded $ 32,500 on Jan.2. Analysts say the trend was reminiscent of the bitcoin buildup on MicroStrategy, which may have been driven by institutional buy-ins. As a result, BTC surpassed $ 31,000. Reaching an all-new high.
Coinbase buyers were the catalyst for Bitcoin’s rally
In the past 48 hours, Coinbase has consistently seen a high premium compared to Binance. At one point, Bitcoin on the exchange was $ 100 more expensive than Binance.
When the Bitcoin price exceeded $ 30,000, the premium reached $ 350. For example, when Bitcoin was quoted at $ 30,000 on Binance, BTC was priced at $ 30,350 on Coinbase.
Ahead of the rally, CryptoQuant CEO Ki Young Ju said Coinbase’s low outflows pose a risk to Bitcoin’s surge. That said, it flows It should increase BTC found new momentum, which it did. he is He said Before the gathering:
“We haven’t had significant flows from Coinbase since $ 23K, the tokens are being transferred decreasing, and the percentage of funds flowing to all exchanges is increasing. Institutional investors could still join anytime soon, but we may face a correction if it continues like this.” .
With Bitcoin approaching $ 29,500, Coinbase outflows are starting to rise. Ki said they are potential over-the-counter (OTC) deals, which are typically bullish for BTC and embody a broader trend. Dwindling Bitcoin reserves In exchanges.
During our pumping, another 34,000 BTUs have been accidentally drawn in the last few blocks pic.twitter.com/8r20JnOGaj
– // Bitcoin ack (BTC_JackSparrow) January 2, 2021
Buyers with high net worth use the OTC market to buy or sell large amounts of Bitcoin. Hence, when signs of OTC deals surfaced, Ki said this was positive for BTC. After just two days of higher outflows, BTC jumped past $ 30,000 to $ 31,400. Ki noted before breaking BTC at $ 30,000:
“$ 12,063 BTC just poured in from #Coinbase. It went to many cold wallets. Maybe OTC deals. Breaking 30k would be tough, but institutions don’t care. They buy it more.”
Why has BTC become so attractive?
According to Ashwath Balakrishnan, analyst at Delphi Digital, Bitcoin became more compelling when It crossed its all-time high.
When the bitcoin price was hovering around $ 4,000, the risk of a major downside was high, along with significant uncertainty about the potential for BTC in the medium term.
Thus, when Bitcoin crossed $ 20,000, the dominant cryptocurrency became more convincing to investors. he is He said:
“Buying $ BTC after ATH is actually better than sniping the bottom of the risk-adjusted lens if you buy with $ 20K, you increase 50% with minimal friction between bottom buyers ~ $ 4,000 increase nearly 8 times but the risk of blowing it was Much higher. “
In the near term, a common narrative that could support Bitcoin’s price higher is the prediction that institutions may not have bought BTC in December due to potential accounting issues.
As such, some analysts say more institutions could jump into Bitcoin in the first quarter of 2021. If this happens, it will be evident from Grayscale. Property under management supervision And the open interest of the CME Bitcoin futures market, this is likely to cause a wider rise in BTC.