Crypto market participants' sentiment
Institutional investors using ETFs increasingly resemble short-term holders in terms of their behaviour. After news emerged of mass applications for Bitcoin spot ETFs to the SEC, they increased investments at a record pace for the past year, investing $200 million a week.
Not getting the desired permission within a month and being disappointed by crypto trends, institutional investors began to withdraw their capital. Over the past nine weeks, the outflow totalled $455 million.
Short-term Bitcoin holders are showing similar behaviour. After skipping the accumulation phase in early 2023, they have bought up BTC between $27,000 and $30,000.
However, the loss of momentum and the subsequent correction disappointed this group, too, resulting in their total reserves declining to 12-year lows. On the contrary, long-term holders have set a new record by accumulating 14.7 million BTC.
Despite some groups' mood swings, the market remains neutral. Realised weekly profits and losses account for only 0.02% of market capitalisation. During major shocks, that figure reached 3%.
In 2023, new investors were just starting to show interest in Bitcoin, but the indicator of fresh capital inflow still didn't surpass the median price.
The flow of investments into crypto is limited by the Fed's high rates, which are enticing large capital to stick to the stable yield on Treasury bonds, as well as the tightening of crypto regulations with the prosecution of individual players. However, that doesn't lessen the growing interest in cryptos around the world, and the approval of Bitcoin spot ETFs in the US has the potential to be a leading factor in a new rally.
StormGain Analytical Group
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