So, it looks like major exchanges, hedge funds and other institutions may have played safe selling ahead of the crypto fall today, as reported by JPMorgan earlier this morning. JPM disclosed that institutions are opting out of the token markets, reversing the previous two quarters of buying, and rotating from bitcoin back to gold or other less volatile assets.
This institutional pullback was no surprise. It was expected to happen sooner or later as investors have become restless opportunists. Frenzied traders may reverse again from sellers to buyers, as every single previous fall in BTC was followed by a significant new high, although the timing is never certain.
Cyclic behavioral patterns keep repeating themselves, and nothing fundamental has changed. While central banks continue to weaken fiat currency, the consensus valuation of crypto as “digital gold” hasn’t gone anywhere.
Cryptocurrency isn’t Going Anywhere
Many individual and retail investors, some of them new to crypto trading, may have felt the urge to deal with anxiety as the giant search engine Google reported that searches for “Cryptocurrency” were hitting an all time high.
Google also reported some other remarkable searches like: “What happened to cryptocurrency today” or “Should I sell my crypto” both rising in the past days.
Another sensitive information that may trigger action to investors, Google also reports that “most energy efficient cryptocurrency” and “environmentally friendly cryptocurrency” are breakout and potentially trending searches.
New Crypto Investors May be Worried
All this happening is a reminder of the simple principle that reads: what goes up will eventually come down. Investors who have entered the crypto market in the last quarter are witnessing a major dip, which may continue.
Yet, for the multi millionaires, a market behaving like today’s made it possible to “buy the dip”, as the six-time Super Bowl champ Tom Brady admitted doing on Twitter. Make no mistake, Bitcoin is now one of the most popular new investments, and many retail investors are entering the space.
Unlike equity markets, there is no official government mandate to support Bitcoin prices, which means that we may see much lower prices before a new high is made.