CoinGecko data shows a 3,5% decline in the price of Bitcoin over the past 24 hours. Institutions are taking advantage of the drop in value to continue accumulating BTC.
After several weeks of recovery, the price of Bitcoin (BTC) opened lower on Wednesday, falling 3,5% over the past 24 hours. The market-leading cryptocurrency fell below $45.000 per unit on Wednesday and hit a low of $43.980. However, at the time of writing, it is trading at over $44.200 per unit.
The US Federal Reserve's (FED) new outlook on controlling inflation may be influencing the crypto market. According to Bloomberg, stocks and bonds have reacted in recent hours to the FED's tightening of monetary policy.
Federal Reserve Governor Lael Brainard said the central bank's priority is to curb inflation, so it is considering implementing a rapid reduction in its bond holdings starting in May. This is part of its strong and strict measures to combat the current high inflation rates. The decision has also impacted the cryptocurrency market and the price of Bitcoin on Wednesday, analysts said.
Bitcoin accumulation strengthens
David Battaglia, a YouTuber and Bitcoin trader, tweeted that volatility in the Bitcoin price and the crypto market was imminent today in anticipation of the FED meeting. However, a few days earlier, he noted that the outflow of bitcoins from exchange platforms to self-custody wallet addresses continues to grow, which is a sign of further accumulation for the cryptocurrency.
For several analysts, higher levels of accumulation are also a sign of consolidation. BTC holders seem to be dominating the market, so the current pullback in Bitcoin price is likely to be short-lived.
Over the past month, the price of Bitcoin has recovered more than 15% of its value, returning to levels seen earlier this year. The market-leading cryptocurrency has been breaking through several previous resistance levels and is posible that $46.000 becomes the new support level.
For other experts, such as Michael Novogratz, CEO of Galaxy Digital Holdings Ltd., a more aggressive and restrictive monetary policy by the FED could cause the price of Bitcoin to remain at more modest levels this year.
Source: Trading View
Buying opportunity
Institutional investors are taking advantage of the slight drop in Bitcoin price to accumulate more cryptocurrencies. Battaglia indicated that the recent correction represents a buying opportunity for many investors.
Recently, MicroStrategy, the largest institutional investor in Bitcoin, reported the purchase of another 4.167 BTC, through its subsidiary MacroStrategy. The American business intelligence company invested another $190 million in the cryptocurrency, acquiring the new bitcoins at a price of $45.714 per BTC. Currently, MicroStrategy has a total of 129.218 bitcoins on its balance sheet, valued at more than $5.800 billion.
Terraform Labs Bitcoin Reserves
Likewise, Terraform Labs, which develops the Terra blockchain ecosystem, reported the purchase of another 5.040 BTC recently, through Luna Foundation Guard. In the last 9 days, Terraform Labs added over 21.000 BTC to its balance sheet, making it the owner of 35.767,9 BTC. The value of Terra's BTC reserves currently exceeds $1.580 billion.
The company's goal is to accumulate reserves worth $3.000 billion in Bitcoin to guarantee the value of its algorithmic stablecoin UST, he pointed analyst Colin Wu. Because of this, it is possible that Do Kwon, founder of Terraform Labs, will continue his strategy of continuing to accumulate as much BTC as possible.
The analysis firm GlassNode also Indian that as Bitcoin approaches its total supply cap, there has been renewed interest among investors in BTC, as a form of pristine financial collateral.
Continue reading: There are only 2 million Bitcoin left to be mined, what happens now?
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