Institutions Accumulate BTC and ETH Following Major Crypto Liquidation
After a significant $1 trillion crash in October, Bitcoin and Ethereum have recovered, largely due to institutional purchases.
Institutions Accumulate BTC and ETH Following Major Crypto Liquidation
After October’s market collapse that saw a loss of $1 trillion, Bitcoin and Ethereum have shown impressive recoveries thanks to a surge in institutional investments.
Wall Street Moves In
Bitcoin recently surged back to a peak of $116,000 following a 3% increase. Ethereum also saw a rise of 9%, hitting $4,200 at one stage. The increase in value for both cryptocurrencies is attributed to significant institutional buying.
CryptoQuant reported that Bitcoin’s Coinbase Premium Index reached a 19-month high on October 10, signaling heightened institutional purchasing amidst a steep market decline. As Bitcoin’s price plummeted from $122,000 to under $110,000 on U.S. exchanges, this premium spiked to 0.182, the highest since March 2024. Typically, such premiums decrease or become negative during market sell-offs, but this instance indicates robust accumulation from U.S. institutions looking to buy Bitcoin at a discounted rate.
This scenario exemplifies a classic behavior among large investors, known as ‘buying the dip,’ where they capitalize on market fears to establish long-term holdings. It may also suggest that Bitcoin has established a new support level around $110,000, with institutions playing a role in stabilizing the prices.
CryptoQuant noted that continued accumulation by this group could alleviate downward pressure and support a rebound when market selling reduces. A similar pattern is evident for Ethereum, which also saw its Coinbase Premium Index soar to 6.0, marking the highest level for 2025 amidst increased institutional accumulation.
What’s Next?
Some analysts view the recent market crash as a strategically orchestrated liquidation event induced by U.S. President Donald Trump’s trade announcements, with implications for resetting market dynamics for upcoming bullish trends. Two days before Trump’s announcement regarding tariffs on China, significant short positions on Bitcoin and Ethereum, amounting to billions, were established by one of Bitcoin’s oldest wallets. When Trump confirmed the new tariffs, the global markets reacted sharply, resulting in major declines across many sectors including cryptocurrency.
Notably, Bull Theory interprets these developments as a necessary market cleansing similar to past instances in March 2020 and mid-2023, which ultimately paved the way for substantial uptrends.
“This stark divergence between the US and global market sentiment underscores the strong long-term conviction held by major players in Ethereum’s future. It suggests that a robust support floor is being established by smart money.”
Conclusion
In light of the developments in institutional investments and market behavior, it will be crucial to monitor if these trends sustain as the market evolves.
