Hopes of a strong Bitcoin price recovery in April appear to have been put on hold as uncertainty continues to loom in the market. Especially now that the impact of recent economic wars threatens to spill over into a full blown recession.
Unsurprisingly, the market conditions have had quite the impact on Bitcoin holder sentiment. A recent CryptoQuant analysis looked into recent investor behavior, especially BTC holders that have been actively responding to the market changes.
The analysis particularly explored where the sell pressure on exchanges was coming from. The findings revealed that short term holders were the biggest contributors to the sell pressure.
The findings which analyzed data from the first 2 weeks of April revealed that shrimps (addresses holding less than 1 BTC) sold 480 BTC per day. For context, whales (with more than 1,000 BTC) sold an average of 70 BTC per day.
Shrimps also sold more BTC than sharks (addresses with balances between 100 and 1,000 BTC) whose balances saw an average of 402 BTC in outflows. The analysis noted that the findings confirmed that a classic shakedown was in play, favoring the flow of BTC from weak to strong hands.
Is Bitcoin Institutional Demand Making a Comeback?
Institutional demand has for the most part been non-existent in the last 2 weeks. However, Bitcoin ETFs recorded their second day of inflows in April, with at least 5 different BTC ETFs seeing positive flows.
Bitcoin recorded $76.4 million worth of ETF inflows on Tuesday. A significant gain from the previous day during which only $1.5 million worth of ETF inflows were recorded.
So far the cryptocurrency has only seen 3 days of positive flows since the start of April.
The inflows observed on Tuesday were particularly notable. This is because they were observed after Trump’s administration seemed to back pedal against the tariffs imposed against China by approving some exemptions.
Many analysts saw this outcome as a sign that the Trump administration was bowing to public backlash and the realization of the U.S heavy dependence on China.
As a result, there was growing optimism about the prospects of tariff war tempers cooling, and perhaps some relief along the way. This may explain why Bitcoin price did not see strong erosion of last week’s gains despite the dip in fear and greed sentiment.
Could Bitcoin Price Make Gains and Achieve Safe Haven Status?
While the potential for a cool-down in the tariff war situation may have boosted confidence, investors remained concerned about the potential aftermath.
Numerous analysts including Bridgewater hedge fund founder Ray Dalio whose believes that a disruption of monetary order could be a bigger threat than recession.
Amid these concerns, Bitcoin investors have been curious as to whether Bitcoin could gain safe haven status just like gold.
The latter has been benefitting from heavy liquidity inflows due to a flight to safety market response. This favored gold as one of the most popular safe haven assets.
The prospect of Bitcoin joining the same class as gold especially during a global economic shake-up has been floating around. Global investment management firm VanECK recently proposed acquiring more Bitcoin as a means of refinancing U.S debt.
The VanEck proposal suggested the introduction of a 10-year Bitbond strategy. It suggests that 10% of funds collected by the government, effectively, linking bonds to BTC. This would attract more risk-averse investors onto Bitcoin and potentially boost more adoption.
Some analysts believe that this move could potentially boost Bitcoin’s safe haven status. In such an outcome, Bitcoin’s finite nature may attract more investors.
Meanwhile, the risk of a recession may still influence Bitcoin performance in terms of low liquidity. However, that could the Federal Reserve lowers interest rates and turns on the money printer.
The post Bitcoin Price Analysis: Short Term Sellers Triggering Uncertainty? appeared first on The Coin Republic.
