Large investors look to be accumulating bitcoin at relatively bargain prices in the wake of the cryptocurrency’s recent pullback.
That’s the suggestion of outflows of the cryptocurrency from institution-focused Coinbase Pro exchange, which rose to over 13,000 BTC, worth roughly $650 million, on Wednesday. The figure represents the largest movement of bitcoin off the exchange in three weeks, according to data shared by the blockchain analytics firm CryptoQuant.
“The outflow went to multiple custody wallets, indicating U.S. institutional investors are still buying bitcoin on the dip,” Ki-Young Ju, CEO of CryptoQuant, told CoinDesk. “I think it’s a bullish signal.”
The exchange’s custody wallets are directly integrated with its over-the-counter (OTC) desk. Institutions typically transact over-the-counter to avoid influencing spot market prices. Hence, outflows from Coinbase Pro which end up in its cold wallets for custody are taken to represent institutional activity.
The latest pick up in outflows is a sign that institutions remain undeterred by the recent price pullback and are confident about cryptocurrency’s long-term prospects.
Bitcoin tanked from record highs above $58,000 to $45,000 early this week in a typical bull market correction. The cryptocurrency has largely traded the range of $48,000 to $51,500 in the past 24 hours, according to CoinDesk 20 data.
Spikes in outflows from Coinbase Pro have consistently marked interim bottoms (the end of price pullbacks and the start of reversals higher) throughout the cryptocurrency’s four-month bull run from $10,000 to $58,000. If history is a guide, bitcoin could soon begin the next leg higher.
On a more cautionary note, Federal Reserve Chairman Jerome Powell assured markets of continued monetary stimulus on Tuesday and Wednesday. So far, however, that has failed to put brakes on the rally in U.S. bond yields. Notably, the 10-year Treasury yield has now jumped to a fresh 12-month high of 1.45%, according to data source TradingView.
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A continue rise in yields could stabilize stock markets, inviting selling pressure for bitcoin, as noted by trader and analyst Alex Kruger.
At press time, the cryptocurrency is changing hands near $51,863, representing a 2.2% gain over 24 hours.