Polkadot the only top 10 coin significantly up – institutional sell-off in BTC?
While fund provider CoinShares suspects profit-taking by institutional investors for Bitcoin, Polkadot (DOT) can underline its strong performance of the last weeks. Market update.
The bitcoin price remains in a crawl – with a tenuous negative sign. At the time of Bitcoin Freedom writing, the No. 1 cryptocurrency is trading at US$34,570. Within the last 24 hours, BTC has thus recorded a minus of around 2 percent.
In order for it to go up again, the bulls first have to conquer back the resistance at 35,000 USD. Otherwise, there is a threat of a slide to the next support at 33,770 USD. A detailed description of the bullish and bearish scenarios for the bitcoin price can be found in the current price analysis.
Are the „Instis“ pushing the Bitcoin price?
The fact that the Bitcoin price is currently struggling to sustainably overcome the 35,000 US dollar mark could be associated with increased selling pressure from institutional investors, namely in the form of crypto investment funds. In its weekly asset flow report for the past week, fund provider Coinshares states an inflow of 359 million US dollars into crypto funds – a level that was last achieved in the period before Christmas. However, for the second week in a row, funds sold crypto assets – first and foremost Bitcoin – this time for the equivalent of 85 million US dollars. Coinshares is assuming profit-taking here, wanting to profit from the recent strong rise in the Bitcoin price.
Strong dollar = weak bitcoin?
Coinshares provides another explanation with an allegedly increased Trade Weighted US Dollar Index. This metric, developed by the US Federal Reserve, determines the purchasing power of the US dollar by comparing it to a basket of 26 fiat currencies
Last week also saw an appreciation in the trade-weighted US dollar, which typically correlates inversely with the bitcoin price, which could also be the reason why some investors are taking profits,
according to the Coinshares report. Whether the Trade Weighted US Dollar Index (DTWEXBGS) really offers a sufficient explanation for the profit-taking by institutional investors, however, is a question mark. The Fed data at least do not yet speak the language of a strengthening US dollar. Only in comparison to the first week of January can a small growth in the DTWEXBGS be observed. However, the index is still far from the pre-pandemic level