The currency falling for seven weeks, a longest history records, encryption currency investors lose! But on the contrary, the capital inflow hit a new high for the year, and the accumulation of institutional bottom-diving is obvious. Does the market expect that the bear market cycle has reached the end, and the market is confident enough to rise?
Record falls and heavy losses for investors
Bitcoin has fallen for seven straight weeks, its longest streak on record, as the sell-off continues.
According to data disclosed by BitStamp, bitcoin's previous longest losing streak was six weeks, in 2014, when it fell from $507 on Aug. 25 to $323 on Oct. 6.
This year, the currency has suffered a severe crash, same from March 28 May 16 closing price of about $46900 to about $31300, a 33% loss.
In addition, in March this year the currency index of fear and greed of 55 points above, the first time since November 2011 to greed, but now the index has fallen to low 8 points, into extreme fear.
As the fall intensifies, the cryptocurrency market is coming under more pressure:
L2BEAT data shows that the current total lock-up volume of Ethereum Layer 2 fell to $4.92 billion, down 14.66% on 7 days;
At present, the total Defi lock-up volume of the whole network exceeds $116.23 billion, which is more than 47% lower than the highest lock-up volume in history ($219.47 billion on January 19, 2022).
The total market value of metaverse related crypto assets fell to $15.1 billion, with a 24-hour trading volume of $3.2 billion.
More importantly, the market remains extremely bearish based on current market moves and sentiment:
On the one hand, the Bitcoin & Poor's index hit a two-year low.
The Bitcoin Poole Index (7D MA) just hit a 21-month low of 0.673, according to on-chain data from Glassnode. The previous 21-month low of 0.686 was observed on July 2, 2021.
Currency sentiment index, on the other hand, in a low, extreme panic is widening.
According to MyToken data, the sentiment index of Bitcoin today is 8, indicating extreme panic. The figure was the lowest since August 2019.
Thus, the sharp decline in the market, magnifying the negative impact of market concerns.
At the time of writing, Bitcoin was trading at $30,609 and ETH at $2,101
Institutional bottom - fishing accumulation, capital inflow is obvious
Despite the depressed market performance, cryptocurrency did not become silent, but showed considerable vitality, mainly reflected in the process of price decline, the accumulation of institutional bottom-hunting behavior is very obvious, which provides an active and effective bottom support for the market.
Data on the chain showed that the four addresses suspected to be owned by the same person or organization had accumulated 37,000 coins.
Bitcoin addresses beginning with BC1qM6, BC1QVY, BC1Q4S and BC1QE3 began on April 8, with 500 coins per day (April 8, 11, 12 and 15), 1,000 coins per day (April 14, April 21 to May 3), 1500 (May 4 to present) or 2500 (April 20) increase BTC holdings at a rate of one address for every 10000 BTC held.
The four addresses currently hold 37,000 BTCS worth nearly $1.117bn. Based on the pattern of increasing bitcoin holdings at these four addresses, they are suspected to be owned by the same person or institution. The label on the chain also showed multiple Kraken transfers at the four addresses.
As a result, the crypto market decline actually provides an entry point for investors looking for long-term gains.
According to Ki, chief executive of CryptoQuant Young Ju, "institutional investors are now doing a market maker to buy COINS." Ki Young Ju studied BTC movements on major exchanges over the past week to come to his conclusion.
Market makers using Gemini sent about 84,000 bitcoins to Binance between May 7 and 10, a record high, according to on-chain analysis.
He added that the selling pressure came mainly from Coinbase as they received the largest bitcoin inflows from Binance. Coinbase BTC/USD on spot trading volume hit a year high, while Coinbase premium hit a low level in three years - 3%. He concluded that market makers had sent around $2.5 billion worth of bitcoin to exchanges last week, adding: "It is not certain that they have completed the selling, but since Coinbase has absorbed most of the selling pressure, it is likely that institutions are accumulating BTC."
About three-quarters of trading activity on Coinbase is institutionally-driven, according to Coinbase's most recent earnings report. One of those major sellers is Luna Guard Foundation (LFG), which sent about 80,000 bitcoins to Gemini and Binance when Terra crashed last week.
Ki Young Ju concludes: "Institutions tried to accumulate bitcoin from $30,000 but had to rebuild the bid walls at $25,000 due to an unexpected sell-off by LFG."
In addition to the bottom of agency action, according to Crypto Slate, the COINS on the encrypted transaction platform Bitfinex long positions to a record high, daily gain of more than 60%, it is worth mentioning that the last Bitfinex BTC/USD bulls on growth, the currency over the next four months on the record.
Bitfinex chief Technology Officer Paolo Ardoino said some whales are adding significantly to their long positions, noting that this does not necessarily mean the market is bullish as these whales may be hedging elsewhere. Data shows that more than $500 million in long bitcoin positions have been liquidated since May 9, while the overall crypto market has seen more than $2 billion in long liquidation.
Bitcoin's bottom-fishing behavior is also confirmed by the inflow data:
Weekly inflows into digital asset investment products hit a year-high this year, hitting $274 million last week, according to weekly data published by CoinShares. Bitcoin has seen the most inflows, totaling $299 million last week.
Despite the short-term pressure on the market, institutional and whale bottom-fishing provided an effective floor, which is probably the main reason bitcoin was able to bounce back to $30,000 after hitting a low of $26,700.