Analysts warn of possible “institutional fatigue” with Bitcoin prices below USD 32,000

Bitcoin (BTC) price has rallied in the past two days after falling to $ 28,850. After the rapid boom BTC failed to overcome the strong resistance at USD 33,000 Jan 23, back under $ 32,000 at the time of writing.

BTC / USD (Coinbase) 1 hour chart. Source:

The Coinbase Premium Return is bullish, but what now?

Early in the morning when the price of Bitcoin fell below $ 32,000, BTC traded much lower on Coinbase than it did on Binance.

The lack of rewards for Coinbase is worrying for two main reasons. First, Bitcoin naturally trades higher with Coinbase due to Tether’s low premium.

Analysts warn of possible “institutional fatigue” with Bitcoin prices below USD 32,000
Analysts warn of possible “institutional fatigue” with Bitcoin prices below USD 32,000

Second, when Coinbase sees a lower price than other exchanges, it shows that there is a lot of selling pressure in the US market.

As the selling pressure on Bitcoin began to mount in the US market, The price of BTC fell sharply in a short period of time.

BTC / USD pair (white) vs. Coinbase Premium Index (blue). Source: CryptoQuant

But almost immediately after BTC rose from $ 30,000, Coinbase’s premium reappeared. At the time of writing, BTC on Coinbase is roughly $ 40 higher than it is on Binance.

The reappearance of the Coinbase reward after almost 12 hours This is a positive sign of a possible trend reversal.

Signs of “institutional fatigue”

However, they are all far from bullish in the short term. QCP Capital Analysts, a team of dealers in Asia, You will see various signs of “institutional fatigue”.

Noting that the main narrative was around the most recent bull cycle institutional demand for bitcoin from the USA, The continuation of the cycle may be in jeopardy if institutional appetite for BTC wanes. Analysts they said::

“Signs of institutional fatigue: We ran a time zone analysis that breaks BTC movements into Asian hours versus US hours (12 hours each). As of March last year, the clear pattern has been relentless buying in the US during Asian whales and miners were on the supply side. “

Bitcoin is losing steam in American times. Source: QCP Capital

Traders emphasized that The strength of the US trading session lost momentum for the first time.

Actually, Last week, the biggest selling pressure for BTC came from Asia. This is a major change in market sentiment. They added:

“After BTC peaked two weeks ago, the US hourly strength lost momentum for the first time. This is a clear sign of demand fatigue from US institutions and corporations that have been the main drivers of this bull cycle. “

What’s next for Bitcoin?

Bitcoin is at risk of entering a correction phase in the first quarter of 2021 if institutional demand for BTC ceases.

Various institution-centric vehicles and platforms, such as Grayscale, continue to register large inflows, which indicates solid institutional demand. At the same time, MicroStrategy continues its policy of buying bitcoin on every drop with the last purchase on Friday for a total of $ 10 million for BTC.

“Today $ 31,000 was a big boost in support so at least not everyone is selling” said Chad Steinglass, Head of Trading at Crosstower, a digital asset capital markets company.

“We have to wait and see whether this wall will be preserved or whether the institutions will continue to accumulate. If so, the trend is likely to re-establish and continue. If they sit on the sidelines and wait for more regulatory guidance, their lack of buying streams will be clearly felt. “

At the same time, the possibility of a deeper correction remains if the U.S. market continues to see a general decline in appetite for BTC storage, and especially if the dollar continues to recover in 2021.

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