Institutional Investors Selling Bitcoin (BTC) Holdings After FTX Crisis

Institutional Investors Selling Bitcoin (BTC) Holdings After FTX Crisis

The FTX crisis caused the crypto market to come under intense pressure, triggering selloffs in the broader market. Crypto influencers warned that FTX collapse may cause institutional investors to lose confidence and trust in the crypto market. On-chain data now reveals that institutional investors are indeed selling their Bitcoin (BTC) holdings after the FTX crisis.

Bitcoin Institutional Investors Losing Confidence in Crypto?

Crypto exchange FTX recorded massive outflows in crypto assets and FTX Token (FTT) selloffs after news of liquidity issues reached investors. FTX’s plans to seek help from investors and peers failed, which forced CEO Sam Bankman-Fried to file for bankruptcy and resign as CEO.

Bitcoin Fund Volume
Bitcoin Fund Volume. Source: CryptoQuant

Institutional investors have also sold their crypto holdings after the FTX crisis. According to the Fund Volume Index, the transaction volume increased significantly during the FTX liquidity issues. The Fund Volume Index indicates that institutional investors sold their Bitcoin holdings.

Bitcoin Fund Holdings
Bitcoin Fund Holdings. Source: CryptoQuant

Moreover, the Coinbase Premium Index indicates that U.S. instrumental investment fell -0.13% after the FTX crisis. Thus, institutional investors probably sold their Bitcoin holdings. This can be confirmed with the Fund Holdings Index, which shows a decrease in the total amount of coins holding digital assets.

Therefore, the recent crypto market crash in May and the selloff amid the FTX crisis impacted the sentiments of institutional investors. The crypto market will likely be sideways in the coming months, rather than a short-term reversal in prices.

Crypto experts suggest $13K-$14K as the important support and Bitcoin (BTC) may fall to the support level for preparing to rebound. However, if it falls below $13K, Bitcoin can touch $10K, which is an important volume profile.

BTC Price Risks Falling

Bitcoin (BTC) price hit a low of $15,682 amid the FTX crisis. After the bankruptcy, BTC continues to be under pressure and trades sideways.

As per CoinMarketCap, BTC price is trading at $15,682, down over 1% in the last24 hours. The 24-hour low and high for Bitcoin are $16,430 and $16,787, respectively.

Also Read: FTX Drainer, Alameda Research Withdrawing Millions In Crypto Assets

Varinder is a Technical Writer and Editor, Technology Enthusiast, and Analytical Thinker. Fascinated by Disruptive Technologies, he has shared his knowledge about Blockchain, Cryptocurrencies, Artificial Intelligence, and the Internet of Things. He has been associated with the blockchain and cryptocurrency industry for a substantial period and is currently covering all the latest updates and developments in the crypto industry.

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.


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