The price of Bitcoin [BTC] has undergone significant fluctuations recently, mostly driven by the Federal Open Market Committee (FOMC) meeting results and the speech delivered by Federal Reserve Chair Jerome Powell.
The digital asset experienced a sharp drop, plummeting to around $98,000—an over 5% decrease within a day. Nevertheless, the cryptocurrency has quickly bounced back, reclaiming the $100,000 level and briefly hitting a peak of $105,000 earlier today.
As of now, Bitcoin is being traded at $101,496, marking a 2.6% dip in the last 24 hours and a 6.1% fall from its all-time high (ATH).
This significant price swing showcases Bitcoin’s ongoing volatility but also demonstrates the strong resilience of investor sentiment. Analysts have been attentively tracking these fluctuations, focusing on institutional activities and their influence on market trends.
A fresh analysis from CryptoQuant’s analyst Burak Kesmeci sheds light on a crucial development in Bitcoin’s market dynamics.
Significant Coinbase Withdrawal Indicates Institutional Appetite
According to Kesmeci, there was an unprecedented Bitcoin outflow from Coinbase during the FOMC announcement. Within an hour, around 10,756 BTC, valued at $1.1 billion, were taken out from the platform.
The transfer was executed in two substantial blocks: one involving 8,093 BTC and the other 2,557 BTC. This major outflow strongly implies institutional buying or middleman transactions likely associated with Spot ETF demand—a trend that aligns with similar institutional activities observed over the past year.
Kesmeci highlighted the increasing involvement of institutional investors in Bitcoin’s market framework.
He stated,
“U.S. investors are continuously amassing Bitcoin, regardless of price fluctuations or market downturns.”
The analyst pointed out that these significant transactions underscore the impact of institutions like RIOT and MARA in propelling market momentum, notably during pivotal events like interest rate announcements.
Bitcoin Metrics Suggest Varied Short-Term Prospects
While institutional behavior indicates a bullish long-term outlook, other essential metrics present a mixed view of Bitcoin’s immediate future.
Data from Coinglass indicates a 0.90% drop in Bitcoin’s open interest, now standing at $68.14 billion. Conversely, Bitcoin’s open interest volume has surged by 36%, reaching $148.57 billion—a signal of heightened trading activity.
Another crucial metric, the MVRV (Market Value to Realized Value) ratio, has also undergone notable changes. The MVRV ratio assesses whether Bitcoin is overvalued or undervalued based on its current market price in comparison to its realized price.
A ratio exceeding 1 typically indicates profitability for holders, with higher values hinting at potential overvaluation. Bitcoin’s MVRV ratio rose to 2.69 recently but has now dropped to 2.52 following the price decline.
This decrease indicates a cooling market sentiment, with traders potentially reevaluating their positions in the short run.