Bitcoin purchases by institutions surged as the Bitcoin price plummeted on Wednesday.
The data shows that large investors remain confident in bitcoin’s long-term prospects and continue to accumulate BTC as the price declines, despite concerns about the negative environmental impact of Bitcoin mining.
OTC counters recorded an outflow of $10,292 $BTC on Wednesday (May 19) as Bitcoin dropped rapidly from $43,000 to $30,000. That was the biggest daily outflow in over three months.
This number continued to increase to 11,056 $BTC on Thursday (May 20) – the highest level since December 31, 2020. Bitcoin outbound transactions also surged to a record high on the same day of 245 transactions totaling nearly $35,000 in BTC, a 10-fold increase in just six days.
Institutional investors and large investors often conduct transactions through the OTC desk to avoid impact on the value of assets on the exchange. Therefore, the amount of Bitcoin transferred out of the wallets of OTC counters is equivalent to the amount of Bitcoin bought back by large investors.
Institutional investors have shown a strong buy-the-dip mentality this year. The value of the 7-day moving average of OTC wallet outflows increased as price fell in the second half of February and after Coinbase’s listing on NASDAQ.
The value of the moving average also increased to over $5,000 BTC on May 12, when the Bitcoin price dropped from $58,000 to $30,000.
The seven-day moving average of daily OTC desk outflows is a simple technical analysis tool that gives the average number of Bitcoins sold over the course of 7 days.