The first analyst to apply the stock-to-flow model to Bitcoin says that institutions are deliberately pushing the price of Bitcoin down in an effort to accumulate cheap BTC.
In an episode of the Bitcoin Fundamentals with Preston Pysh, PlanB says that Bitcoin’s price action in the last few months suggest that someone is trying to influence the market behind the scenes.
“The price action that we saw last month and especially this month, the down action, was always in the illiquid hours of the market. So it was deliberately destructive. It was not sold by someone who wanted the most dollars for his Bitcoin. It was sold at illiquid times in the market with far too big of a chunk to get a good price so it was destructive selling.”
According to the quant analyst, he sees a clear pattern of destructive selling in the market, which he says is indicative of institutional players accumulating the largest crypto asset.
“Actually, if you look at the price charts, for example, the daily chart for the last couple of months, you see that all these destructive selling [events], all this selling, which by the way took place at the end of each month strangely, all that selling was bought within one or two weeks. It was like a V-shaped recovery within two weeks. That also is, for me, a bit of a hallmark of institutional buying that they scare people out of their positions. They, together with their OTC (over-the-counter) desks, scare retail and normal people out of their positions, even liquidate people out of their positions and then buy the scraps in the weeks after it.
That is especially effective if you sell and push the price down in illiquid hours and then buy the stuff at liquid hours in small chunks. That is basically what I’m seeing since January, so the last five months. That’s very, very bullish in my eyes.”
In a new tweet, PlanB shows four instances where prices have quickly recovered after brutal sell-offs.
“Selling big chunks during illiquid hours at the end of each month followed by continuous buying of small quantities during liquid hours at the beginning of each month. Four V-shaped recoveries. Institutional buying?”
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