It does seem like investors have been losing interest in Bitcoin (BTC). The search volume for Bitcoin (BTC) and cryptocurrencies have been on a constant decline since the beginning of the correction. This has convinced many in the crypto community that investors have lost interest for now and that it will probably take a long time for money to return back to the market. All of this sounds reasonable when you consider how the average mainstream investor would react. However, let us not forget that a lot of major players including institutional investors are now getting into the game, and we will have to look a lot further than straightforward clues to determine the level of interest in Bitcoin (BTC) and cryptocurrencies.
The price of Bitcoin (BTC) has been on a steady decline as shown by the BTC/USD
weekly chart above. However, we have not seen the same decline in accumulation. On the very contrary, the Accumulation/Distribution ratio on the above weekly chart for BTC/USD shows us that the ratio has been in a clear consolidation since the month of May. Last month, this ratio passed the December 2017 mark to reach a new all time high. This is clear indication of a rising interest in Bitcoin (BTC) and the accumulation that is going on in OTC (over the counter) markets which may not influence the price, but the major players are accumulating to sell to the average investor in the future. Even major players on Wall Street, like ICE (owner of NYSE) are getting into the game with its BAKKT platform. After the unprecedented success of crypto companies like Binance and Coinbase, old money has become even more interested to get in the game.
However, they do not play by the same rules. This means that they will not just jump in and grab all the Bitcoin (BTC) and then sell it to the next guy. They are going to keep the chicken alive while it lays golden eggs. To do that, they are going to employ the old school approach of controlling the means of production. This means that they want to control the Binances and Coinbases of the future. Large venture capital firms and hedgefunds may not be directly buying Bitcoin (BTC) but they are putting a lot of money in new projects aimed at controlling the means of production. This could be mining hardware manufacturers, blockchain development companies, exchanges etc.
The monthly chart above for BNC:BLX
(BraveNewCoin Liquid Index for Bitcoin) presents a more clearer view of the accumulation we discussed before. After the Mt. Gox hack, we saw accumulation decline against distribution. However, since then, it has been steadily consolidating before a big rally just before 2017. This lasted all the way till 2019. Some investors are thinking that we are probably due for another rally just like the one in 2017, but that does not seem to the case. All indicators at this point including the accumulation pattern on this chart shows that we are on the verge of a rally just like the one before 2017.
It is going to be a lot bigger than the one in 2017 and most professional investors realize this. That is why they are not going to give up until the last weak hand is shaken out because accumulating at this point is very similar to accumulating at $1,000. It is in their interest to make you believe till the very last moment of their accumulation that things are about to get worse. However, if you watch the charts for yourself, you will realize that the same things have happened over and over again throughout the history of investing and it would be unreasonable to expect that this time will be different.