BTC sinks after a quiet week. But now what?
“Crypto prices often rally into the spring before declining into summer,” Compass Point analysts wrote
Images with good Karma/Shutterstock modified by Blockworks
This is a segment from the Forward Guidance newsletter. To read full editions, subscribe.
BTC was rather quiet again last week as various narratives seem to be pulling sentiment in different directions.
We then saw the asset’s price sink below $94,000 around 1 pm ET Tuesday — down more than 3% from seven days prior.
Crypto exchange volumes reached their lowest level since the US presidential election, Compass Point analysts said in a Tuesday note.
Last week, the US spot bitcoin ETFs had $580 million of net outflows, Farside Investors data shows — breaking a six-week inflow streak.
And yet, on the other side, we have Crypto Twitter lighting up at each sign of institutional buying. 13F filings (showing holdings of investment managers with at least $100 million AUM) have given us a glimpse into that.
There was the Abu Dhabi sovereign wealth fund — Mubadala Investment Co. — holding $437 million of BlackRock’s iShares Bitcoin Trust (IBIT), as of Dec. 31.
Meanwhile, the state of Wisconsin reported having nearly 6.1 million shares of IBIT in Q4 — roughly double the 2.9 million shares it had held the prior quarter.
There was also Tudor Investment Corp’s increased BTC position. The Paul Tudor Jones-founded firm upped its 4.4 million shares of IBIT held in Q3 to 8 million shares (worth $427 million) in Q4.
This reminded me of a piece I wrote early in my Blockworks career. Jones, talking about bitcoin, said on CNBC’s Squawk Box at the time: “I like the idea of investing in something that’s reliable, consistent, honest and 100% certain.”
Jones noted allocations of 5% in gold, 5% in bitcoin, 5% in cash and 5% in commodities at that point before considering other positions based on Fed actions, etc.
The billionaire then said in October 2023 that gold and BTC “probably take on a larger percentage of your portfolio” given the macro picture and geopolitical tensions.
So, based on past comments, Tudor’s hefty IBIT position reveal is not exactly surprising. But this bitcoin vehicle being among the firm’s largest single positions is certainly noteworthy.
Going back to price action, BTC remains well off its all-time high around $109,000.
Mike Marshall, Amberdata’s head of research, noted that liquidity is accumulating around the $95,000 mark “with smart money positioning and retail making small purchases.”
He attributed BTC’s “quiet phase” to investors waiting for clearer economic data [and] policy and renewed market confidence.
“Better CPI results for February and resolution of tariff uncertainty could trigger this,” Marshall noted.
BTC’s recent low-volatility profile mirrors those seen in September/October 2023, as well as those in February, June and October of 2024, Compass Point’s Ed Engel and Joe Flynn argued.
“Pronounced volatility” followed each of those four periods, they added, with price moving upward three times.
“Crypto prices often rally into the spring before declining into summer,” Engel and Flynn wrote. “BTC’s [$92,000] cost basis for short-term holders still provides strong support.”
Get the news in your inbox. Explore Blockworks newsletters:
- The Breakdown: Decoding crypto and the markets. Daily.
- Empire: Crypto news and analysis to start your day.
- Forward Guidance: The intersection of crypto, macro and policy.
- 0xResearch: Alpha directly in your inbox.
- Lightspeed: All things Solana.
- The Drop: Apps, games, memes and more.
- Supply Shock: Bitcoin, bitcoin, bitcoin.
