Bitcoin is recouping losses clocked in over the weekend, which isn’t a surprise to market participants servicing institutional investors.

At last check, bitcoin was trading up more than 9% at more than $37,000. That’s a far cry from the levels over the weekend, when a wave of long liquidations of leveraged retail trades sent the market tumbling to $30,000. While retail traders were selling, institutions were overwhelmingly skewed to the buy side, says Cambrian CEO Martin Green. 

“Institutional buyers were buying up those tips, taking advantage of retail de-leveraging,” he said. “You could see [dips] quickly bought up.”

The following chart shows bitcoin’s price performance earlier in the week. 

Indeed, over the weekend, bitcoin financial-services provider NYDIG said that its clients were overwhelmingly skewed to the buy side — which indicated that the market could soon recover from its lows.

“Our institutional client base saw the drawdown as a buying opportunity. During the drawdown, a full 89% of our client orders were to buy. We see that our client base, made up of institutions with very long-term time horizons, such as insurance companies, see pullbacks as a time to add to their positions.”

At the same time, data from Coinbase showed that retail users were far more bearish, skewed only 38% to the buy side. 

“The initial move triggered selling from retail on Coinbase (see chart) and also retail platforms that use Coinbase for liquidity,” a note from the firm shared with institutional clients noted. “The buy ratio for Coinbase retail has been approximately 60% over the past two weeks, but on Sunday this was 38% as people rushed to take profits.”

It added that market participants on the institutional side were buying, with some noting that they wouldn’t be surprised if bitcoin hits $40,000 by week’s end. From the note:

“Speaking to other market participants, a similar story unfolds. Many saw selling over the weekend but have a long list of buyers that they expect to step in and support Bitcoin here. More than one has commented that they wouldn’t be surprised to see BTC back at $40k later this week.”

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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Author: Frank Chaparro

Categories: Bitcoin

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