Institutional investors are betting on the bitcoin rally, according to this metric

Bitcoin mutual funds and ETFs continued to attract capital flows, going from $40 million the first week of May, to $298 million last week, according to the latest CoinShares report. The trend of institutional purchases of bitcoin has begun to pick up in May, reversing the sales in the month of April, when the outflow of BTC and other cryptocurrencies from these funds was recorded for a total of USD 349 million.

Taking into account that, along with the incoming flow of bitcoin of almost 300 million dollars to the main investment funds, some punctual sales of other cryptocurrencies were recorded; the total incoming flow to the cryptocurrency market was USD 274 million last week, note report. The growth with respect to the inflows of capital of the previous week was 585%.

The total of institutional investments so far in May is USD 312 million, while the total acquired by the funds in 2022 amounts to USD 583 million, says CoinShares.

Regarding last week’s institutional buying momentum, CoinShares suggests that investors saw the decoupling of the Terra USD stablecoin from the dollar, and the intensive sales that arose in the market, as an opportunity to purchase.

It’s not the first time BTC traders have behaved this way

A major boost from institutional investments is usually followed by a bullish breakout, as has already been seen in the bitcoin and cryptocurrency markets. The graph shows, for example, that in the 43rd week of 2021, between October 25 and 31, the historical maximum of institutional investment in bitcoin and other cryptocurrencies occurred, totaling USD 1,447 million.

This remarkable drive from investors it preceded by 8 days the all-time high of the bitcoin price. In general, investors’ buying trends occur with the expectation of generating profits in the medium and long term.

Then, the correction that began that November 8 (after reaching the ATH), has been maintained for 27 weeks. However, in this period of sustained price decline, purchases have dominated over sales, even if there have been weeks in which investors have withdrawn capital from bitcoin and other cryptocurrency funds.

If April was markedly bearish, the resurgence of purchases in May could indicate that bitcoin would have found support at $30,000. For traders who have a positive view on the future of bitcoin, the current moment is appropriate to buy, at relatively low prices that allow multiplying profits.

As evidenced by the new Glassnode Accumulation Trend Score (ATS) metric, commented by CriptoNeticias on May 13, the recent accumulation registered by bitcoin holders has contributed to a stabilization of the price above USD 29,000 in the last week. At the time of writing this article, the bitcoin price is USD 30,200, according to the Crypto News price index.