The Bitcoin (BTC) market may soon see an influx of institutional investors. According to a tweet by Ki Young Ju, the CEO of CryptoQuant, the price of Bitcoin is close to the estimated entry price of institutional investors who have been using Coinbase's services.
The analysis is based on the on-chain volume weighted average price (OWAP) of BTC outflows on Coinbase. This technical indicator is used to weigh price against volume traded to determine if a market trend is overbought or oversold, helping traders time their entries and exits from the market.
A consequence of the entry of institutions into the market at the current price could be a price upswing. This is because of the belief that institutional investors — who are also often whale-level investors — drive bullish moves in the crypto market.
$BTC price now is close to the estimated entry price of institutional investors who have been using Coinbase services like prime brokerage, custody, etc.
— Ki Young Ju (@ki_young_ju) October 5, 2022
If you still believe institutions drive this market, this bull opium could work for you. pic.twitter.com/goQTSnuCN7
Institutions still being held back by lack of regulatory clarity
The observation is coming at a time when several institutions have been showing a growing appetite for crypto adoption. Bloomberg reports that the Nasdaq, the second largest stock exchange by market cap, has been the latest institution to voice plans around offering crypto services.
While the Nasdaq has elaborate designs for crypto — including expanding into offering custody services to its clients — the company tells Bloomberg that it is waiting for greater regulatory clarity for the industry before deploying its plans. The story is similar for other institutions.
However, regulatory clarity may soon arrive for the market, especially in the U.S. The Financial Times reported that the Biden administration has urged lawmakers to speed up crypto regulation efforts.
Godfrey Benjamin
Arman Shirinyan
Dan Burgin
Alex Dovbnya
Vladislav Sopov