‘Sustained institutional buying’ will hold Bitcoin above $50K: CrossTower
According to the report, addresses holding over 1,000 BTC rose to record highs in January on the heels of sizable retracements — evidencing strong dip-buying from whales despite the relatively high price of Bitcoin.
Combined with positive business developments in the industry, such as Mastercard’s decision to integrate certain cryptocurrencies and BNY Mellon’s newly launched custody services, CrossTower believes the outlook remains bullish for the digital asset markets. The firm also described the growth of corporate Bitcoin treasuries, such as Tesla’s $1.5 billion BTC acquisition, as strengthening the bullish case.
“We believe the record amounts of addresses holding 1,000+ BTC in recent weeks is proof of rising institutional interest and likely reflects the many headlines in January and February of institutional investors becoming active in Bitcoin,” Martin Gaspar, research analyst at CrossTower, told Cointelegraph.
“In our view, many institutional investors are entering with a buy-and-hold mentality given their understanding of Bitcoin as digital gold. The on-chain data suggests that these investors, traditionally seen as smart money, saw the January price weakness as an opportunity to acquire BTC or enter the space, which supports our bullish view of BTC.”
CrossTower also noted a sharp decline in the sum of Bitcoin held on centralized exchanges amid record stablecoin holdings and volume, describing the trend as providing further bullish momentum to the markets. Analyzing data from CryptoQuant, CrossTower found stablecoin volumes on crypto exchanges totaled $7.4 billion as of February — up nearly 159% from December 2020.
BTC price briefly fell below $50,000 on Monday but has since regained its footing above $53,000. Despite the sudden correction, Bitcoin has appreciated by more than 12% over the past week. Year-to-date, the BTC price is up almost 85%, according to CoinMarketCap data.