Institutional investors are marginally reducing the size of their short exposure to Bitcoin, which can be considered a positive change in the market. Data from CryptoQuant shows that institutional short positions on Bitcoin Futures have been declining, which could signal potential price support for the crypto asset.
The data reveals that institutional traders have steadily reduced short exposure to CME Bitcoin futures contracts. Institutional investors held large short positions for months, contributing to a bearish market. However, the current trends show these positions as slowly decreasing, which may signify a positive future for Bitcoin.
The reduction in short positions means that the institutional investment players do not expect a further drop in the prices of Bitcoin. A drop in shorts often indicates the market is less bearish and that the possibility of price gains could be on the horizon due to reduced bearish pressure. Recently, Bitcoin’s price has been volatile, and experts have attributed the changes to macroeconomic factors such as inflation and geopolitical uncertainty.
Bitcoin whale moves millions to Kraken
In addition to institutional activities, an old Bitcoin whale moved a large amount of BTC to the Kraken exchange a decade later. As reported by Arkham Intel, this whale, which began mining Bitcoin in the first month of its existence, has transferred more than $4.21 million worth of BTC to Kraken in two transactions over the past month.
The whale, currently holding around $73.4 million worth of Bitcoin, made the first transfer of about 5 BTC about a month ago and the second transfer of 634,000 dollars worth of BTC recently. Such a large movement from long-term holders may influence the market’s flow and prices.
Short-term holders exit, reducing selling pressure
While institutions change their future expectations, short-term holders (STH) remain engaged in the Bitcoin market. Data from CryptoQuant reveals that such investors tend to sell their assets at a loss when prices decline, which may also fuel sell-offs during bearish trends.
However, the total supply that is available to short-term investors has been on the decline. As these “weak hands” are forced to sell, the pressure that is driving the sale reduces. A lower STH supply could also set a price floor and allow long-term investors to enter the market.
“This reduction in selling pressure can create opportunities for accumulation and may signal a price floor,” CryptoQuant stated. This movement of Bitcoin from short-term investors to long-term investors could be a good foundation for future price rises.