Institutions should start buying Bitcoin (BTC) again, leading analyst PlanB has said as one exchange sees a fresh $250-million withdrawal.
In a tweet on Tuesday, PlanB argued that conditions were now right for buyers to continue accumulating BTC with confidence.
PlanB: “Probably time” for Q2 buying
BTC/USD had seen a lack of momentum over the weekend, culminating in a dive to near $56,000. With resistance near all-time highs of $61,700 now at its lowest since the time that level was first reached, it may now pay to be bullish.
In addition, multiple on-chain indicators suggest that sellers are exhausted. This capitalizes on an existing narrative that favors hodling, not short-notice trading or selling, as the prime strategy for Bitcoin investors.
“Now that all Pi-cycle, Wave, Rainbow and NUPL fans have sold their bitcoin, it is probably time for institutions to resume buying into Q2,” PlanB wrote, highlighting four indicators.
Of these, the so-called “Rainbow” price chart, which categorizes spot price in terms of investor sentiment, highly favored hodling this week, as well as buying more BTC at current prices.
An interesting comparison is with the top of the two previous bull markets in late 2013 and late 2017. Then, Rainbow signaled a bubble-like top forming, with the implication that hodlers should take profit. Since current readings are far from such a peak, the indicator suggests that the current price gains still have a long way to go before the bull cycle top is in.
BTC/USD Rainbow price chart. Source: Blockchain Center
As Cointelegraph reported, PlanB’s stock-to-flow Bitcoin price models call for $100,000 and more this year, with as much as $576,000 and higher hitting during the current halving cycle ending in 2024.
Big outflow spikes remain
Meanwhile, proof that institutions are still interested may already be in.
On Monday, professional client-focused exchange Gemini, saw $257 million in BTC leave its holdings in a 10-minute period.
These large outflows have characterized recent months and, along with the success of instruments such as the Purpose Bitcoin ETF, hint that demand shows no sign of stopping at near $60,000 per coin.
Gemini exchange outflows annotated chart. Source: Lex Moskovski/ Twitter
Across exchanges, reserves of BTC are still falling, down below 2.3 million as of this week.
Bitcoin exchange reserves vs. BTC/USD chart. Source: CryptoQuant
According to data from on-chain monitoring resource Glassnode corroborated by Whalemap, buyer support more broadly is continuing to cement itself at $57,000, reducing the likelihood of deeper price dips.
Title: Buy more Bitcoin, analyst tells institutions as $257M in BTC leaves Gemini
Sourced From: cointelegraph.com/news/buy-more-bitcoin-analyst-tells-institutions-as-257m-in-btc-leaves-gemini
Published Date: Tue, 06 Apr 2021 14:00:00 +0100