The price of Bitcoin has lifted significantly from its protracted slump with clear indications that institutions have been buying in on the dip.
Earlier today, the Bitcoin price was poised below $32,000 after testing $32,200 last night as the 24-hour transaction volume rose by 34 per cent to $37.6 billion.
Two weeks ago, the flagship cryptocurrency dramatically plummeted to briefly touch $25,000 before clinging to the underside of $30k over the rest of the month.
A reasonably robust rally over the weekend continued into Monday, and looks set to re-test some higher values as we stumble into June.
According to analysts at GlobalBlock, it looks to all intents and purposes that much of the driving force of a return to green signals is coming from institutions and wealthy individuals preparing for long-term investments after buying the price dip.
“Last week many analysts were concerned about crypto falling whilst the S&P 500 rallied, but yesterday Bitcoin reached a high of $32,200, as it performed significantly better than the S&P 500 futures whilst Americans were on holiday,” said Marcus Sotiriou, analyst at the UK based digital asset broker.
“Data from the crypto research firm CoinShares shows that crypto funds saw inflows of $87 million last week, after the previous week saw outflows of $141 million. Inflows were dominated by Bitcoin, as it remains the most popular crypto investment for institutions in this current macro environment, whilst Ethereum saw outflows of $11.6 million.”
This coincides with Ethereum performing worse relative to Bitcoin last week, signalling investors were capitulating assets that are further on in the risk curve. As of last week, the total year-to-date inflows to all crypto-backed funds amounts to $0.52 billion.
“This is remarkably below the inflows at the same time last year which was $5.9 billion,” added Sotiriou.
“Nonetheless, a positive figure for year-to-date inflows is promising when taking into consideration the negative price action we have seen over the past seven months. It indicates that institutions and high net worth individuals have been net buyers throughout this bear market.
“I think this is further evidence that whilst the current macro headwinds exist, Bitcoin’s supply is being transferred from weak hands to those with long-term conviction.”