Biggest Bitcoin Selloff Since Black Thursday

After more than a week of Bitcoin losing value, a report by Glassnode shows that Monday saw the biggest sell-off since March 2020.

That was when panic selling occurred due to fears about the market brought on by the COVID-19 pandemic. Such event subsequently became known as Black Thursday in the crypto scene.

Retail Investors Sell vs. Institutions Buy

Despite the massive sell-off, prices haven’t tanked as much as one would expect. In total, 30,749.89 BTC were sold on Monday. But as retail investors sold their BTC, companies and institutions have taken the opportunity to buy it.

As a result, Binance – a popular exchange especially between private traders – registered an inflow of around 26,000 BTC. Coinbase, on the other hand – one of the exchanges preferred by institutional investors – registered a net outflow of 146 BTC.

Although 146 BTC isn’t an enormous amount, it shows that, overall, more BTC is being bought than sold on the exchange often preferred by institutional investors. At current daily transactional volumes, Coinbase is still seeing more BTC being bought than sold.

Coinbase has seen almost entirely net outflows of BTC since breaking last cycles $20,000 USD all-time high, a trend that has continued this week. Coinbase is the preferred venue for U.S. institutional accumulation and given the scale of typical daily withdrawals (10,000 to 20,000 BTC per day), it suggests that larger buyers remain in active accumulation during this correction.

Glassnode “The Week On-chain (Week 20, 2021)”

The effect on the overall crypto market

This is not the first time Bitcoin has tanked in price. Indeed massive corrections like this one happened before and BTC has always recovered.

It’s also worth mentioning that the sale of BTC to Binance and other exchanges does not necessarily mean that people are looking at getting rid of their cryptocurrency. Many of the Bitcoins sold may simply be exchanged for other cryptos, given the gains Ethereum (ETH) and other cryptocurrencies have also made recently.

This provides further indication that the recent inflows are likely to be driven by both new market entrants (panic sellers) and potentially due to capital rotation into other crypto assets.

Glassnode “The Week On-chain (Week 20, 2021)”

Overall, more Bitcoin is being sold across all exchanges – This data seems to suggest that the market may start recovering sooner rather than later, possibly thanks to institutional support.