Bitcoin falls below $55,000 as market sentiment may remain bearish

Source: FX168, author: Su Huaijin, original title: [Bitcoin Daily] Bitcoin fell below the 55,000 mark, $800 million in funds were suddenly transferred in large amounts, and Fidelity "educated" investment advisors on Bitcoin.

On Tuesday (March 23), the price of Bitcoin hovered between $54,000 and $56,000 after yesterday's drop, with signs that market sentiment may continue to be bearish.

(Source: Coindesk)

“The market is no longer as confident,” Arcane Research, a Norwegian blockchain analytics firm, wrote in its weekly newsletter on Tuesday. “More traders are taking short positions.”

Glassnode's cryptocurrency analysts said on Monday that Bitcoin may be entering the second half of its bull market or later as concerns about falling prices grow. Glassnode's weekly analysis found that there has been an increase in the "wealth transfer" from long-term Bitcoin holders to new speculators, which the company said was reminiscent of the market's peak. The report said that Bitcoin's bull market will eventually reach an "exciting top" that will occur as large holders increasingly use Bitcoin to realize profits. "These studies show that the current situation is similar to the second half or late stage of the bull market," Glassnode said.

Jean-Baptiste Pavageau, partner at digital asset management firm ExoAlpha, said Monday's pullback may be partly due to traders closing positions before the expiration of the main options market on Friday. Once this problem is resolved, some short-term selling pressure may weaken. But data from Bybt shows that the exercise prices of Bitcoin options are concentrated between $40,000 and $52,000. Many of these contracts may have far exceeded the current price and are therefore unlikely to be closed before expiration. Pavageau believes that after leaving the support level of around $45,000, the price of Bitcoin will consolidate in the range of $50,000 to $60,000. He said that Bitcoin's "overall upward trend" remains "intact."

(Source: Bybt.com)

Rishi Ramchandani, director of business development at crypto lending platform BlockFi, noted that trading volumes have gone “quiet” during the market’s latest drop. Ramchandani said Bitcoin will likely “hover between $55,000 and $60,000 unless we see some news catalyst.”

And today, according to data provided by blockchain analysis company CryptoQuant, about 14,666 bitcoins were moved from Coinbase's Coinbase Pro platform in a small number of transactions in the U.S. market, worth nearly $800 million. It is not yet known what the impact of this large transfer of funds will be on the market. It may be that one or several large investors have just completed a new round of buying and are now withdrawing funds from the exchange for long-term holding or other purposes, or it may be an internal transfer. "The outflow of funds is divided into multiple wallets, which may be their hot wallets, representing internal transfers or custodial wallets of institutions," said Ki Young Ju, CEO of CryptoQuant. Coinbase's cold wallets for custody are directly integrated with the exchange's over-the-counter (OTC) desk. Institutions and large traders usually trade through OTC desks to avoid affecting market prices too much. Therefore, the outflow of funds from Coinbase Pro is usually regarded as institutional demand for Bitcoin. "I think it may be a custodial wallet, which may indicate that institutions are still buying on dips," said Ju. But he added that this is just a guess.

As the number of inquiries from institutional investors increases, Mike Durbin, head of the institutional division at Fidelity Investments, said that most wealth managers and financial advisors are still in "education mode" for cryptocurrencies. He said that while some advisors and investment firms that manage the wealth of the wealthy have become "mature," most are still mastering the technology. "They know what they are doing, and more importantly, their end investor groups also know what they are doing - but the vast majority are still being educated." Durbin said that as "alternative investments" (which typically include real estate, private equity and hedge funds) become increasingly popular, interest in Bitcoin and other digital assets may increase. "I think the growth rate of Bitcoin or digital assets will follow that of broader alternative investments." There is still a lot of work to be done to help advisors understand the portfolio construction of these expressions."