Huge Bitcoin purchases on Coinbase pushed BTC price past $33,000

Bitcoin price surpassed $33,000 as buyers on Coinbase aggressively accumulated BTC

Coinbase witnessed a huge spike in activity from buyers today as Bitcoin (BTC) touched $33,150. According to analysts, this trend is reminiscent of the Bitcoin accumulation carried out by MicroStrategy, potentially backed by institutional buy orders. Thanks to this boost, BTC surpassed $33,000, reaching a new all-time high.

BTC/USD Daily Chart (Coinbase)
Daily chart of BTC/USD (Coinbase). Source: Tradingview
Buyers on Coinbase have caused Bitcoin to rally
Over the past 48 hours, Coinbase has been priced higher than Binance. At one point, the value of BTC on the exchange was $100 higher than on Binance.

When Bitcoin crossed the $30,000 mark, the premium peaked at $350. In other words, when Bitcoin hit $30,000 on Binance, it was $30,350 on Coinbase.

Prior to the rise, CryptoQuant CEO Ki Young Ju warned that low outflows from Coinbase posed a risk to Bitcoin’s price. In his view, outflows should increase to allow BTC to find new momentum. Shortly before the rally, he explained:

„Coinbase has not seen significant outflows since the price reached $23,000, transferred tokens are down and the fund flow ratio is increasing for all exchanges. It is still possible that institutional investors will enter the scene soon, but we could face a correction if this continues.“
As Bitcoin hovered around $29,500, Coinbase’s outflows began to surge. As Ki pointed out, this could be due to over-the-counter (OTC) trades, which are typically bullish for BTC and exemplify the broader trend of depleting BTC reserves on exchanges:

„As we continue to climb, another 34,000 BTC have left the exchanges in the last few blocks very nonchalantly.“

High net worth buyers use the OTC market to buy or sell large amounts of Bitcoin. So when signs of OTC transactions emerged, Ki highlighted them as positive factors for BTC. Just two days after the peak of outflows, BTC surpassed $30,000, reaching a record high of $33,150. Prior to the recent milestone, Ki noted:

„$12,063 BTC just left #Coinbase. They arrived in multiple cold wallets. Possible OTC trades. Conquering $30,000 will be difficult, but institutions don’t care. They simply buy more.“
Coinbase outflows
Coinbase outflows. Source: CryptoQuant
Why is BTC becoming so attractive?
According to Ashwath Balakrishnan, an analyst at Delphi Digital, Bitcoin has become more attractive after surpassing its previous all-time high.

When Bitcoin’s price was around $4,000, the risk of a significant decline was high, combined with the considerable uncertainty surrounding BTC’s medium-term outlook.

In contrast, when Bitcoin hit the $20,000 mark, the leading cryptocurrency became more attractive to investors. Balakrishnan explained:

„From a risk perspective, buying $BTC post-ATH is actually a better strategy than trying to hit the low. If you bought at $20,000 you made 50% with minimal friction. Buyers of the low at ~$4,000 made almost an 8x but their risk of losing everything was much higher.“
In the short term, many believe that Bitcoin’s price could be pushed even higher by institutions that did not buy BTC in December due to potential accounting issues.

Therefore, some analysts argue that in the first quarter of 2021 more institutions could invest in Bitcoin. This scenario, which will be evident by looking at Grayscale’s assets under management figures and the CME’s Bitcoin futures market open interest, will likely cause a broader BTC rally.