THE UPS AND DOWNS IN ETHEREUM PRICES CAN BE ATTRIBUTED TO THIS

Unlike the rest of the market, Ethereum did not witness much decline on December 4. On that day it only fell by 2.3%. However, the wick it created managed to terrify every Ethereum investor. The bigger question is How did it happen?

Ethereum toppled by institutions

The events of December 4 can be credited to multiple reasons, however, and IntoTheBlock may have figured out the reason individual to Ethereum.

As per data, the institutional investors were responsible for this fall since their volumes suddenly shot up by $6 billion and reached $18 billion.

Before closing at $4124, ETH almost dropped to $3470 that day owing to the huge downside wick. The last time volumes this high were observed was right before Ethereum dropped by 7.73% on November 15.

This was also verified by the fact that these large transaction volumes represented 89% of all volumes on December 4 which were a little over $20 billion.

In any case, investors did not let go of this opportunity and rushed to buy the dip.

Even investors who were previously inactive suddenly came back and active addresses spiked by 50%

Some of them were in for buying the dip, however, most others were probably not, as the day after December 4 more than 81k ETH worth $354 million were sold into exchanges as per netflows.

Anyhow, Ethereum investors continue to remain the most profitable, with only 10% of all active addresses facing losses.

Additionally, as more addresses join the network, ETH’s volume and liquidity rose as well. Looking at the average balance which had not seen a major drop since September, it’s apparent that ETH investors are going to continue rising up.

Presently, the bearish momentum seems to be subsiding away as MACD is about to make a bullish crossover above the signal line.

And the rising ADX highlighted the strength of the active trend which seemed to be getting stronger. Since candles are currently green, it could mean that the active trend could turn out to be an uptrend and once ADX breaches 25.0, the market could see a reversal. their position. A majority of investors continue to hold their Bitcoin today. This highlights that Bitcoin is viewed as a long-term investment. Another 14% consider BTC as a P2P medium for money transfers. On the contrary, 1/5th of panelists consider it a medium to pay for goods and services.

Overall, in terms of investment planning, three times as many investors would consider owning BTC as an investment rather than a currency.

In addition to this, crypto exchange platforms witnessed an immense rise as well. More than half (59%) mostly invested through crypto trading apps like eToro or Coinbase, representing a paradigm shift from last year when more than three-quarters of investors (77%) preferred a Bitcoin exchange. This portrays the trust the residents had over such platforms regardless of the regulatory concerns.

Diversification

It’s not just Bitcoin though, as the Grayscale report notes that more than half of investors were aware of Dogecoin and Ethereum. Almost three-quarters (74%) of investors have heard of Dogecoin, surpassing the level of awareness around Ethereum (56%). Litecoin, Cardano, and Tether are also on investors’ radar, with the awareness level hovering above 25% for each of them. And, most investors who own Bitcoin also own at least one other cryptocurrency.

Different age groups witnessed a similar diversification as per the research. Interest in Bitcoin investment products rose significantly among older investors. Investors between ages 55 and 64 (46% in 2021 from 30% in 2020), and female investors (53% in 2021 from 47% in 2020). Here’s what Michael Sonnenshein, CEO of Grayscale Investments had to say. “The results of the 2021 Bitcoin Investor Study confirm that more investors see long-term value in adding Bitcoin and digital currencies to their investment portfolios. While it is encouraging to see attitudes towards crypto continue to evolve, it’s still early days for this industry. It’s incumbent on all of us to remain focused on educating the investing public, so investors — across generations and demographics — can access this once in a generation opportunity.”

There was near-universal increase in Bitcoin adoption across all age groups, genders and levels of education. The reported cited being able to invest very low amounts, accessibility at any time and a large sector growth potential as key reasons for its popularity. So overall this portrays bullish narratives across the region.

Need for Bitcoin ETF

Even with the rise of market segments and use cases, such as decentralized finance (DeFi) and non-fungible tokens (NFTs), Bitcoin still accounts for 46% of the total value of crypto markets. Grayscale revealed that more than three-quarters (77%) of US investors said they would be more likely to invest in Bitcoin if an ETF existed. The launch of a Bitcoin ETF played a pivotal role in the rise of BTC adoption.

In its concluding note, the report discussed a rising demand for Bitcoin education as “42% of investors want to know more about Bitcoin.”

It is noteworthy that this demand was lower when compared to 47% and 49% in 2020 and 2019, respectively. But on a positive note, it “reflected a growing familiarity with Bitcoin,” as per the report.