Even though 2022 was a rough year for cryptocurrencies, Bitcoin has remained the leading industry asset. That situation will likely remain unchanged for the foreseeable future. More importantly, institutional demand for bitcoin has risen strongly in the past few days.
Any Bitcoin price should appeal to investors and institutions. It is the only scarce form of hard money that will exist. Its supply is capped at 21 million BTC, and most of those are in circulation already. Even though the price dipped below $17,000 a few weeks ago, the current momentum is rather bullish.
After a good run in January, Bitcoin and other crypto assets noted a brief pause. Prices went sideways and slightly bearish, although the uptrend will likely resume soon. The BTC price is currently near $23,000 again, which remains a key resistance level. However, if broken successfully, the price can – theoretically – shoot up to $25,000 in the following weeks.
Institutional demand for Bitcoin contributes to the uptrend in January and early February. Whether one likes or hates it, institutions continue to scoop up crypto assets at these low prices. More people willing to sell will put more money into these institutional hands. Time will tell if that is a good thing. If Tesla and MicroStrategy become examples for other market participants, there isn’t much to fear.
In the past week, institutional demand for Bitcoin noted strong momentum again. Statistics from Coinshares indicate a healthy weekly flow for Bitcoin, at $68.5 million. That is far more outspoken than Ethereum ($0.7 million), BNB Coin ($0.1 million)m or Solana ($0.5 million).
It is worth noting there was ZERO demand for Litecoin, Tron, and XRP. A bit surprising as Litecoin continues to flirt with the $100 level. Institutional demand for Bitcoin remains prevalent, but altcoins are of far less concern. That is interesting and may indicate the expected “alt season” isn’t around the corner just yet.
The strong Bitcoin dominance among institutional investors has always been outspoken. Ethereum still ranks second, although it has roughly one-third of Bitcoin’s market share in this segment. Interestingly, multi-assets are also popular, although institutional investors remain risk-averse.
With this in mind, it will be interesting to see where BTC goes next. Retail demand for BTC seems less of a factor than some would like it to be. Instead, the institutional demand for Bitcoin remains in full swing. That may explain why there was a steep run-up, although nothing explosive like several years ago. However, it may also hint at a lack of trending below $22,000 for a while.
Traders looking for big moves will remain glued to their charts over the coming days and weeks. There will, undoubtedly, be minor dips and rises along the way. Even so, there’s good money to be made by bold and adventurous people.
One other aspect to note is the Bitcoin Dominance Index. Despite a rise to nearly 41% a few weeks ago, it has dropped below 40% again. Ethereum, USDT, BNB Coin, and other assets also lost market shares. Retail demand appears to focus on lower-cap altcoins, whereas institutions have a different agenda.
