Aaryamann Shrivastava
FXStreet
- Institutions have pulled out more than $107 million in the week ending August 4 after 21 weeks, as bearishness seems to be exceeding optimism.
- While the future of spot Bitcoin ETFs continues to hang in the balance, Cathie Woods believes that most probably all ETFs will be approved at once or none would be.
- Bitcoin price is most likely set to face a price drop to $24,700 or potentially $21,400.
The lack of recovery in the crypto market seems to be getting to the investors, especially the large wallet holders. Their behavior had already been displaying bearish tendencies; their recent moves reaffirmed this scenario. Additionally, skepticism regarding the recent Bitcoin spot ETF filings is further fueling a bearish narrative.
The crypto market loses more than just money
Institutional investors have been one of the biggest driving factors for the recent rally, and their withdrawal tends adversely affect the market. A similar situation seems to be developing at the moment, with the big-buck investors taking a step back from crypto-related assets. The week ending August 4 noted more than $107 million pouring out of crypto products.
Institutional investment
Bitcoin, altcoins, stablecoins FAQs
What is Bitcoin?
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
What are altcoins?
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
What are stablecoins?
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
What is Bitcoin Dominance?
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
These outflows are the highest observed in about 21 weeks, making this move a concerning development for Bitcoin price. As it is, BTC has been ranging under the $30,000 mark with no intentions of flipping the price point into a support floor. According to an FXStreet analysis, there is a much larger potential for a price drop than a rise.
The range between $24,777 and $21,473 on the quarterly chart is facing an FVG (fair value gap), which represents an imbalance in the order flow. This would open up short sellers to gains, although flipping the $30,000 level into support could invalidate this bearish thesis and enable a jump beyond $35,000.
BTC/USDT 3-month chart
But the likely scenario is bearish since that is the sentiment held out by authorities and top crypto players, particularly in regard to the recent spot Bitcoin ETF filings. The Securities and Exchange Commission (SEC) has 45 days to respond to the applications filed, which ends this week. However, the entire market is expecting a delay to be announced.
Addressing the same, Cathie Woods, founder of ARK Invest, stated,
“I think the SEC, if it’s going to approve a Bitcoin ETF, will approve more than one at once.
ARK recently claimed to be the first to file for a spot Bitcoin ETF, although BlackRock was the first to announce it in the past couple of weeks. While initially, all the filings were found to be inadequate, refreshed and updated filings have since been added to the regulator’s docket for consideration, pending results this week.
Like this article? Help us with some feedback by answering this survey:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Turn off Solana and win $400,000 - Solana Foundation executive announces offer
Solana has been touted as an Ethereum killer, but as with every blockchain in the crypto market, the network does not come without its fair share of issues. While many who get hacked or exploited deal with the issues after the fact, Solana intends to get a step ahead by making a very lucrative offer to white hat hackers.
Grayscale vs. SEC deadline: Commission faces a midnight Friday deadline to challenge August 29 loss
Grayscale Investments secured a resounding victory in its longstanding case against the US Securities and Exchange Commission in late August. The lawsuit started in October after the firm approached the D.C. Circuit Court pushing to have its Bitcoin Trust converted to an Exchange-traded fund.
Loom Network price hits strong weekly resistance after 32% surge as LOOM ranks high on Korea’s Upbit
Loom Network token is highly bullish, passing as a rather lucrative investment for scalping traders, buying and selling the asset within a short period to make small profits.
Voyager founder charged by CFTC for fraud and by FTC for misleading investors that lost $1 billion
Voyager was among the first crypto companies to collapse and file for bankruptcy in 2022. While the platform has been making efforts to return its customers' assets since then, it looks like the regulatory bodies are not willing to be patient.
Bitcoin: Can BTC bears challenge crypto’s 2023 bull rally?
Bitcoin (BTC) price is at a critical juncture in the weekly time frame, where bulls and bears are battling for control. However, a multi-time-frame analysis shows that BTC is bullish daily and is likely to rally higher.