BTC, ADA, EOS, THETA, AAVE


During an interview with Bloomberg, Grayscale CEO Michael Sonnenshein said that in addition to hedge funds, pension funds and endowments had also started investing in the Grayscale family of products. This suggests that a broad spectrum of institutions are accumulating Bitcoin (BTC).

As this trend gathers speed, investment banks have also decided that they do not want to be left behind. A recent filing from Morgan Stanley shows a purchase of a 10.9% stake in business intelligence firm MicroStrategy, a move that was likely made in order to gain exposure in Bitcoin. With 70,470 Bitcoin in their possession, MicroStrategy has become a proxy play on Bitcoin.

Several analysts suspect that the current demand could also be coming from investors who have been closing their gold positions and buying Bitcoin. On a query about the recent underperformance of gold, CNBC Mad Money show host Jim Cramer speculated that institutional money may be flowing into cryptocurrency.

Crypto market data daily view. Source: Coin360

While there have been positive reports about institutional purchases, traders should also keep track of the people who have been selling because at some point the rally will lose momentum and investors will look to book profits.

Analysts at Material Indicators suggest that mega whales may have booked profits on Jan. 7 when Bitcoin hit $40,000 and further selling from whales could also be the reason for the price drop seen today. However, aggressive buying at lower levels resulted in a strong rebound.

But that has not deterred the whales from selling. Bitcoin whales in South Korea have been dumping their positions over the past few days, as seen from the multiple $100 million deposits to exchanges. While the selling has not caused a massive rush to the exit, traders should be careful with their positions because even if a couple of large investors in the U.S. rush to the exit, it could result in a sharp fall.

If Bitcoin corrects sharply, most altcoins are also likely to follow suit, but if Bitcoin remains strong, these top-5 cryptocurrencies could outperform in the short term.

Let’s analyze their charts to spot the critical levels to watch.