Chainalysis data show large investors bought 34,000 BTC on Tuesday and Wednesday
Last week proved to be Bitcoin’s worst of the year. During the so-called Black Wednesday crash, Bitcoin plunged more than 30%, hitting lows near $30,000 not seen since January. A green daily candle the following day gave many optimists hope for a quick rebound, but those gains evaporated over the weekend. On Sunday, Bitcoin fell another 10%, sliding back to around $33,800.
Negative sentiment around Bitcoin has mounted recently, fueled by headlines such as the U.S. Treasury’s proposed mandatory $10,000 reporting, comments from Elon Musk, and China’s crackdown on bitcoin mining and cryptocurrency payments.
However, while retail traders focused on the FUD (fear, uncertainty, doubt) surrounding those stories and the resulting sell-offs, clear signs of buying also emerged. Glassnode data showed that Bitcoin exchange outflows hit an all-time high (ATH) yesterday, indicating accumulation. At the same time, USDC exchange flow volume also reached an ATH, suggesting investors are preparing to buy more crypto.
So who is buying the dip? According to a Friday report from Bloomberg, institutions are stepping in. Several crypto hedge funds added to their Bitcoin holdings last week, including MVPQ Capital, ByteTree Asset Management, and Three Arrows Capital. Blocklabs Capital Management increased positions in Ethereum, Solana, and other decentralized finance (DeFi) assets at last week’s discounted prices.
Indeed, Chainalysis data showed large investors purchased 34,000 BTC on Tuesday and Wednesday.
Kyle Davies, co-founder of Three Arrows Capital, told Bloomberg: “Every time we see a massive liquidation it’s an opportunity to buy. I wouldn’t be surprised if Bitcoin and Ethereum retraced the entire dip within a week.”
Orders executed off-exchange are also worth noting. As Glassnode’s founders pointed out, transfer volumes from OTC desks typically rise during sell-offs as institutional buyers take Bitcoin off order books.
They tweeted: “Once again strong buy-the-dip activity. Whatever lows #Bitcoin may reach this summer, they won’t last long. Best to keep hodling.” In fact, last Wednesday recorded the largest Bitcoin outflow from OTC desks since December.
So while many retail investors may grow nervous and sell during the current downturn, it appears whales and institutional players are on the other side of those trades, accumulating at lower prices.