Not all wealthy investors are concerned about the pullback of BTC, and large ones keep calm
Major capital investors are not so much worried about Bitcoin, despite the recent price drop. Since its annual peak, BTC has fallen nearly 17%, but big investors seem unconcerned.
Wealthy BTC investors with buy-low mentality
There are several potential reasons why BTC`s big holders and wealthy investors are not showing bearish activity over the medium term.
- First, before there was a drop, as CryptoSlate reported, the derivatives market was extremely overheated. After a 98% rally in three months, a 20% correction was expected.
- Second, many data points on the network show that the ongoing rally was organic. Consequently, demand from buyers is likely to be sufficient to sustain the uptrend if it gains momentum again.
- Third, although the futures market on paper faced liquidation worth more than $1 billion, many professional traders foresaw an approaching fall. Consequently, most were either hedged or deliberately allowed their positions to liquidate by holding larger opposing positions.
The largest crypto-holders and investors managing hundreds of millions to billions of dollars in crypt seem unconcerned about the recent Bitcoin correction.
From MicroStrategy CEO Michael Saylor, to Three Arrows Capital CEO Su Zhu, wealthy investors seem confident of further BTC development.
Alex Wyse, who ranks top on the FTX leaderboard and has traded in $1 billion for the month, said his team is waiting for bids to participate.
Wyse stressed that Bitcoin could face extraordinary volatility after such a big price move. But he noted that he was betting, indicating that he wanted to hoard money on recessions. He wrote:
“We are alone and waiting to return. We remain trailing stops. If you’re normal, just buy and HODLE. Any downward or up movement can be huge. Remember, this is not the regular season. These are tough playoff minutes. But this is where championships are won”.
From October to November, network analysts, including Willie Wu, noted that the rise was driven by smart money. Institutions and whales appear to have amassed a large amount of BTC, fueling growth momentum.
Market trends also showed that institutions in the United States have been particularly active in accumulating Bitcoins in the past two months.
Data in the network shows the accumulation of large holders
Interestingly, the blockchain data from Glassnode shows a similar trend. Small and medium-sized Bitcoin owners sold throughout the rally, anywhere from $13,500 to $18,000.
But data on the net shows that whales are still piling up, meaning overall confidence in the medium to long term BTC.
In the short-term prospective – some consolidation until the next step up. The massive elimination of long positions on November 26 destroyed the futures` market and exchange bid books.
The ideal scenario for Bitcoin would be to recover the derivatives market, and futures financing rates would remain low as the crypto market recovers.
Alternative cryptocurrencies such as ETN, XRP, XLM and DeFi have already begun to recover.