01.04.202102:43 Forex Analysis & Reviews: Bitcoin's declining demand from institutional investors and a reversal pattern

Bitcoin is gradually rising, giving more signals about its further dynamics. Meanwhile, interest in cryptocurrencies has declined, which was proved by recent statistics.

On Wednesday, CoinShares released a new report relative to the volume of investments of financial companies in cryptocurrencies and products based on them. It showed that the inflow of investments fell to $ 21 million during the reporting week.

It is noted that the interest of institutional investors in cryptocurrency has significantly dropped. It has reached the October 2020 levels, when Bitcoin was below $ 14,000.

Trading volumes also plunge. So now, the weekly volume of transactions is approximately $ 788 million, against the averaged $ 900 million when this year started. But compared to last year, they remain quite high. In 2020, the average volume was about $ 137 million per day.

Among market participants, capital inflows were positive. Grayscale, which occupies a leading position with a portfolio of $ 40.6 billion, has an inflow of $ 100 thousand. 21Shares received $ 22.6 million in new investments. Meanwhile, CoinShares recorded an outflow of $10.8 million dollars which might be due to profit-taking.

Bitcoin does not lose its popularity among investors. During the week, the inflow to the main cryptocurrency amounted to $ 10.2 million. At the same time, JPMorgan analysts note that retail investors invested more in bitcoin in the first quarter of this year than institutional investors.

What does this data say now? Perhaps, the impulse is fading. This likely means that it will be difficult now to update the historical high.

On the other hand, an interesting picture has developed on the H4 chart. An inverted "head and shoulders" reversal pattern was formed within the local downward trend 61759.10 - 59869.35 - 53225.61 of March 13. Its neck line was broken. Now, if we consider the upward potential, the BTC/USD pair has potential to rise in the area of $ 63,000 per coin. But if you only take about 80% of the head height, then it will be possible to reach the historical high.

Meanwhile, there is an area of 58340.66 - 59517.79 between the red and blue dotted lines, which has not yet been broken though. This indicates that the expected growth scenario after consolidating above it remains relevant.

Therefore, two arguments in favor of Bitcoin's local growth are considered. There are also technical pivots and targets. For now, there is no reason to forecast when the historical high will be reached.