Bitcoin could lose $ 30,000, what’s the most bullish scenario?

Bitcoin corrected last week and now holds critical support at $ 30,806. This could be the last major support area and the bulls will need to hold it to prevent further downward movement.

BTC on critical support in the daily chart. Source: BTCUSD Tradingview

There is fear and uncertainty in the crypto market as traders and investors cannot predict future price movements.

Analyst Checkmate highlighted the two sides of the coin in a report for Glassnode Insights. In a sea of ​​bulls and bears, the analyst tried to find a balance.

In the bulls’ favor, the analyst believes long-term Bitcoin investors have shown resilience in the current marketplace. Hence, he believes that investors have shown buying behavior that resembles a dollar cost average style accumulation.

Contrary to popular belief, on-chain data not only suggests that long-term investors prefer BTC, but there has also been a surge in potential new owners, as shown in pink below. As a result, the net entity growth created more entities than destroyed, this is shown in blue below.

Bitcoin BTC BTCUSDSource: Glassnode Insights

In order to substantiate his thesis, Checkmate presents the Exchange Net Position Change across all exchange platforms. In the graph, that metric suggests an increase in bitcoin outflows from these platforms, which is around 36,300 BTC / month.

Bitcoin BTC BTCUSDSource: Glassnode Insights

There is a correlation between BTC outflows or inflows, the chart shows a bearish scenario in May and June 2021 as the latter increase. This creates more selling pressure on the price of Bitcoin. The metric appears to be retreating, but its impact on the market is not immediate.

There could be a long period of accumulation, similar to September and October 2020, before Bitcoin attempts to recapture previous highs. The analyst added:

HODLing seems to be the preferred strategy. Long-term holders currently hold 75% of the circulating supply (6% at a loss, 69% at a profit). If the current coin maturation rate (14.75k BTC / day) continues, LTHs (Long Term Holders) would hold 80% of the coin supply in about 2 months (…)

Institutional investors are nowhere to be found as Bitcoin trends wear off

Bitcoin has been testing its current support levels for several weeks. So far, it has managed to take a major blow after hitting its annual opening at around $ 29,000.

However, one component appears to be missing from the bullish market structure: institutional demand. When MicroStrategy, PayPal and Square integrated Bitcoin into their business model, the market experienced a boom that led to new all-time highs.

A similar effect occurred when Tesla bought BTC in mid-February, pushing BTC’s price from $ 38,000 to its all-time high of around $ 64,000.

Now, BTC-based institutional investment products are underperforming as the Grayscale Bitcoin Trust (GBTC) trades at a discount for several months. The analyst believes this indicates a “lackluster” demand that may inspire more capital to move away from the crypto market.

Canada’s BTC Exchange Traded Fund (ETF) has also seen a slowdown along with over-the-counter (OTC) trades. This mechanism was popular with institutions looking to enter the market and has been in decline, as shown below:

Most recently, on the institutional demand side, OTC desk stocks recorded a net inflow of around 1,780 BTC in the last two weeks, which went against the structural outflow trend that has existed since November 2020.

BTC BTCUSDSource: Glassnode Insights

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