Monday, March 1, 2021
Home Latest News Bitcoin Fears of Bearish Correction Loom as Bitcoin OTC Deals Plunge

Fears of Bearish Correction Loom as Bitcoin OTC Deals Plunge

As on-chain data indicates a plunge in its over-the-counter deals, Bitcoin faces the risk of undergoing a major downside correction.

The total amount of Bitcoin tokens flowing from Coinbase Pro’s addresses to their newly developed custodial cold wallets has decreased after BTC/USD crossed over $23,000, according to data gathered by CryptoQuant.

These wallets carry Bitcoin for big crypto-enabled companies such as Genesis Trading and Ruffer Investing as CryptoQuant’s CEO Ki-Young Ju noted earlier.

This makes massive BTC transfers from Coinbase Pro to new wallets to be equated as OTC transactions by the data analytics portal.

As Bitcoin recorded another all-time high on Thursday, reaching $29,321 ahead of New Year’s eve, the statements appeared. Its latest rally came on the basis of a devaluing US dollar and prospects for new institutional investments in the space of cryptocurrency, especially after the major announcement by Skybridge Capital that it owns $182 million worth of Bitcoin.

The news also coincided with a recovery from their low of December 13 in stablecoin inflows into all cryptocurrency exchanges. Earlier this week, a CryptoQuant metric revealed that the overall number of stable coin counts rose from 20,000 to 30,590.

This revealed that the $29,000 rebound was mainly retail-driven, further raising Bitcoin’s ability to correct lower in the coming sessions. Tiny and medium-capital dealers tend to sell the blockchain at the local top, while long-term buyers are using those dips to buy it.

With OTC deals going down, it may be likely that institutions are waiting to accumulate more of their units for the next Bitcoin correction. “We haven’t had significant Coinbase outflows since $23k, tokens transferred is decreasing, and the fund flow ratio for all exchanges is increasing,” explained Mr. Ju. “Still possible that institutional investors would join anytime soon, but we might face a correction if it continues like this.”

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