The value of the assets of the main institutional investors in Bitcoin has dropped by more than $12 billion. This comes after the crypto market crashed following the Federal Reserve’s interest rate hike on May 4th.
Largest BTC Holders
According to current figures from OKLink, Block.one, MTGOX K.K, Microstrategy Inc., Tesla Inc., and the Tezos Foundation are among the Top-5 firms with the largest BTC positions.
Only the first three have more than 100,000 BTC in their possession. In comparison to the bulk of other cryptocurrencies, this means that BTC ownership are significantly less concentrated. Even Block.one, the largest institutional Bitcoin holder, holds only 0.86 percent of the total Bitcoin supply.
Despite this, institutional investors have lost more than $12 billion as a result of the crypto market’s recent meltdown.
Market investors initially reacted positively to the Federal Reserve’s interest rate announcement. Some analysts were afraid that interest rates could raise by 75 basis points rather than 50. However, the crypto community discovered that access to low-cost loans severely limits.
Furthermore, the Federal Reserve expects to raise interest rates further in the coming months. As a result, the gloomy view of the situation won out, resulting in bearish sentiment dominance.
The market is experiencing widespread panic. On the other hand, the majority of short-term investors and traders lack strategic thinking. They would rather sell their coins due to fears of a catastrophic collapse in the coming weeks. As a result of such heated viewpoints, activity in the major exchanges has been fast expanding.
According to Santiment, a blockchain analytics firm, the net inflow to exchanges of 40,600 BTC represents the highest BTC movement in over two years.
Furthermore, the lack of consensus in the crypto community regarding the most likely BTC price in the coming days and weeks characterizes such rising activity. Bears may anticipate further price declines and attempt to take advantage of this opportunity to generate additional profits.
Fundamental analysis may use by hodlers and institutional investors to confirm that BTC is currently undervalued by the market. It suggests that stockpiling it is reasonable independent of short-term price volatility.
Finally, some traders decide to sell BTC in order to minimize their losses. However, historical evidence shows that whales and institutional investors are better at recognizing local bottoms and earning larger long-term returns.
According to current patterns, the crypto market will continue to face increasing regulatory pressure from the Federal Reserve in the coming months. Simultaneously, Bitcoin and the main altcoins will take this opportunity to address major technical issues and consolidate before the next bullish cycle begins.
BTC has a strong support at around $30,000, which has shown to be crucial in averting an uncontrollable drop in the major cryptocurrency. BTC must, however, surpass the following two big resistance levels in order to reverse the negative trend: $35,000 and $40,000. The former is the most recent 6-month low. The latter, on the other hand, is historically significant.
Long-term investors can confidently enter the market and open long positions after breaking through these crucial resistance levels.