Are your bitcoins still there? Data shows that while retail investors are selling off, institutions are still actively buying.

The significant pullback in Bitcoin last week scared off many retail investors, but it seems to be a good opportunity for institutional investors to increase their positions.

Retailers Selling Off, Institutions Buying In

Bitcoin prices surged significantly last night, reaching as high as $38,000, a difference of nearly $8,000 from last week's low of $30,420. This surge was attributed to massive unwinding and deleveraging by contract and margin traders that caused Bitcoin prices to plummet over 20% in a short period. Martin Green, CEO of Cambrian, a digital asset management company focusing on quantitative trading, mentioned that while retail traders were liquidating their positions, the majority of institutions were leaning towards the long side. He stated:

"Institutions are buying at the bottom while retail investors are deleveraging. You can see a lot of trading at the price bottom and it's being bought up quickly."

Bitcoin financial services provider NYDIG mentioned that the vast majority of its clients were inclined towards long positions, indicating a potential market rebound from the lows.

"During the downturn, 89% of our clients specified to buy. Our client base, composed of institutions focused on long-term value investments like insurance companies, generally view pullbacks as opportunities to increase their positions."

Record Outflow of Funds

Furthermore, data analytics company CryptoQuant's founder, Ki Young Ju, also noted that when Bitcoin dropped to the $30,000 price level, many institutional participants bought the dip. He tweeted that Coinbase, a platform often used by institutional participants, saw a significant outflow of Bitcoin on the day of the big drop:

"Many institutional investors bought BTC at prices between 30-32k. On January 2nd, Coinbase saw the highest outflow in three years."

There are many institutional investors who bought $BTC at the 30-32k level. The Coinbase outflow on Jan 2nd was a three-year high.

Speculative guess, but if these guys are behind this bull-run, they'll protect the 30k level. Even if we have a dip, it wouldn't go down below 28k. pic.twitter.com/3GXLpjyWbp

— Ki Young Ju (@ki_young_ju) January 13, 2021

Coinbase Report Supports this View

On the other hand, data from the U.S. exchange Coinbase shows that bearish actions from retail investors far outweigh those of institutional investors, with only 38% leaning bullish. According to a market report shared by the exchange with institutional clients:

"The initial price movement triggered dumping by Coinbase retail investors and retail platforms using Coinbase as a source of liquidity. Over the past two weeks, the purchase rate of Coinbase retail investors has been around 60%, but on Sunday, due to panic selling, this ratio dropped to 38%."

The report also added that institutional market participants are still actively buying, and if Bitcoin returns to $40,000 this weekend, they wouldn't be surprised:

"In conversations with other market participants, a similar story has emerged where many are focusing only on the selling, but in reality, there are many buyers looking to purchase Bitcoin at this time. More than one person believes that if BTC returns to $40,000 later this week, they wouldn't be surprised."