The leading cryptocurrency is at the tenets of its potential, at least. The volatility around its prices has not been the one to take a shine on the most valuable cryptocurrency. BTC is still going out strong each day, weathering the storms amidst price dips and bouncing back incredible fashion.
The holders of the digital asset’s recent activities have led analysts to believe that the dark days might be near for the cryptocurrency, which has already reached two ATH barely eight days into 2021. The frequent selling spree, terrible trading, and poor holding pattern is spelling doom.
High withdrawals could take their toll on prices
In a recent survey by analysts, most exchanges confirmed that withdrawals involving BTC were at an all-time high, amidst high transaction volumes going up due to an influx of investors in the space. It is normal for high withdrawals to negatively affect pricing, considering that this is not the first time.
However, what is not ascertained in the report is the impact of high transaction volume on prices in the future. The consistent purchase of BTC by institutional investors is on the rise, amidst the mass selling of the digital asset by retailers since it crossed $30,000, and the Whales are still maintaining the holding pattern.
The anticipated price drop of BTC will likely not be too significant if the institutional investors play their part despite the bullish selling by mid-level retailers. Analysts predict that if the Whales maintain their stand and institutional investors continue their mass purchase, prices will somewhat rise instead of fall.
Before now, the top two driving factors in the price rally have been high trade volume and network volatility. However, a look at the current statistics, especially considering the number of withdrawals provided by exchanges, shows that Bitcoin reserves are the primary driving factor of the recent price rally.
Prices look like they need Institutional Investors to survive
In a report last October by popular crypto data firm Dewcryst, many exchanges dropped in reserves to their barest minimum, amidst price stagnancy. However, the intervention by institutional investors was the push needed to witness a price momentum of about 180% within weeks.
The situation is not the same compared to what is occurring now, as withdrawals were low at the time. The system was set to flourish basking on the influx of institutional investors and was devoid of withdrawals, which is the case now.
The current situation of things right now suggests that price falls hinging on the drop of trade intensity and mass exchange withdrawals, the prevalence of both suggesting price fall looms. The negative energy is not needed at the moment for BTC, which seems to be gaining new steps every day. However, bitcoiners will rest their hopes on institutional investors, affecting prices positively, baring the effects of high withdrawals rampaging the exchanges.