Bitcoin's Green Buy Signal Drives Institutional Purchases, Price Stabilization

Bitcoin has recently shown a green buy signal, as indicated by the Divergence metric between Global Liquidity and Bitcoin. This signal, which is rare, suggests a potential rise in the price of Bitcoin due to increasing market liquidity. Historically, such signals have emerged when the Z-Score reached -3 below zero, indicating a buying opportunity. Conversely, red sell signals have developed when the Z-Score climbed above +3, signaling a potential price decrease. For instance, Bitcoin experienced a significant price rise from below $500 to above $1,000 in early 2016 when a buy signal appeared. Similarly, a red warning sign emerged in late 2017 before Bitcoin reached its peak value at $20,000, triggering a swift price decrease. In early 2020, the buying indicator triggered as Bitcoin surpassed the $10,000 level, leading to its highest price point ever. The current green signal suggests an opportunity for a Bitcoin price rise due to growing market liquidity.

Institutional investors, including Binance and Metaplanet, have been actively purchasing Bitcoin following the appearance of a buy indicator in the market. Binance has been consistently buying Bitcoin, with the latest purchase involving tokens worth $250 million sent to the market maker, Wintermute. This strategic buying by Binance indicates a growing market presence for the cryptocurrency. Additionally, Metaplanet, a Japanese public company, has expanded its Bitcoin holdings by acquiring an additional 150 BTC, valued at approximately $12.9 million. This purchase brings the company's total Bitcoin treasury to 3,350 BTC, worth over $291 million. The acquisition was made at an average price of approximately $80,000 per BTC, signaling confidence in Bitcoin's long-term value. The purchase activities of these institutions could drive BTC price growth through elevated market demand, creating more buying power and strengthening market trust. Extended purchases by these institutions show potential to drive the BTC price higher by attracting additional investors to join the rising market. The buying coincides with other institutions like BlackRock and MicroStrategy also accumulating BTC during the recent dip.

The cumulative net taker volume also indicates that aggressive BTC selling has decreased since February, as shown by lower net taker volume changes. From February 24 to mid-March, Bitcoin faced massive selling pressure that reduced its price from $95K to nearly $75K. However, BTC prices have seen stabilization upon each major sell-off event and then started to recover slowly. The negative net taker volume reached a point of decline during mid-March, indicating a reduction in market selling activity. Subsequently, Bitcoin experienced its price rebound above $85K as the green cumulative net taker volume surfaced in the market on the 20th of March. The absence of major economic slowdown together with controlled asset liquidation points toward reasonable BTC price expansion according to current market patterns.