Bitcoin (BTC) price fell below the support level of $ 18,000 on November 22nd. This decline is due to the fact that BTC continuously recorded high institutional and OTC (off-market) trading volumes in November.
Data suggest that lGrowing institutional demand was likely one of the main catalysts behind the BTC price surge to $ 18,965.
According to data from Skew, the Grayscale Bitcoin Trust’s volume in the OTC markets increased significantly in the fourth quarter.
OTC markets are stock exchanges in the United States where institutional and accredited investors can buy a variety of securities. Grayscale Bitcoin Trust operates similarly to an Exchange Traded Fund (ETF) in these markets.
This bitcoin rally is led by institutions
There is a distinct difference between the current uptrend and the 2017 rally. This time around, Bitcoin has shown more composure and stability throughout the rally, restoring major resistance levels one by one.
Bitcoin saw a sharp surge in spot volume, open interest in futures exchanges, and institutional demand. However, various metrics such as Google Trends have shown that public interest in Bitcoin is relatively low.
The combination of the above two factors suggests this Institutions were likely the main driving force behind BTC’s recent rally.
The large participation of institutions in a longer Bitcoin rally is bullish as institutions are likely to accumulate BTC as part of a long-term strategy.
This trend explains why most of the big declines in Bitcoin in November resulted in aggressive buying. As Cointelegraph reported, Dan Tapiero, Co-Founder of 10T Holdings, He said “the big kids will buy the falls now”.
Tapiero emphasized that too real fundamentals drive the current trend, in contrast to the mania of 2017. Said::
“The third wave will dwarf the 2017 movement and should last for several years.”
Michael Novogratz, Billionaire investor in bitcoin, He also said that BTC was on the way to becoming an institutional asset.
In recent months, more institutions, hedge funds, and investment banks have started comparing BTC to gold. Novogratz said on CNBC:
“Bitcoin is now an institutional asset. Point. The good news is that most of the institutions have not yet entered. So 2021 will be as good or better than 2020. “
3 levels of whale groups to watch out for when BTC drops below $ 18,000
Whales or high net worth investors often use over-the-counter markets and exchanges at the same time to accumulate large amounts of Bitcoin.
In November, analysts at on-chain analysis company Whalemap discovered the appearance of large groups of whales.
Whale groups are the price levels at which whales buy BTC and do not move their stocks.
Whalemap data shows that USD 16,411, USD 16,278 and USD 15,691 remain large groups of whales. So, Even if BTC does suffer a short-term retreat, the aggressive November whale buildup created important areas of support.
In the near future, After BTC’s small correction from $ 18,865 to less than $ 18,000, the whale groups are expected to act as key support levels. The $ 17,300 and $ 16,411 price levels remain the main support levels.