BTC Markets Entering a New Phase in Potential Accumulation Season

Asset managers appear comfortable with increasing their exposure to bitcoin.

AccessTimeIconNov 2, 2022 at 8:31 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Call the current crypto winter the season of accumulation.

Bitcoin and ether’s significant decline in recent months is providing bullish investors the opportunity to accumulate at a favorable cost basis. Larger crypto investors are continuing to explore this opportunity.

Bitcoin has been trading in a narrow range for nearly five months, with support at about $19,000 a good portion of the time. Ether has dipped as low as $1,000 but has mostly hovered around $1,300 over the same period. Now, both have stepped up a rung, with support above $20,000, and $1,500, respectively.

The increases come amid a fourth consecutive 75 basis point interest rate hike by the Federal Open Market Committee (FOMC) in the Federal Reserve's fierce battle to stem inflation without throwing the U.S. economy into a steep recession. Crypto markets have largely responded to the central bank’s monetary gyrations and other macroeconomic events, usually rising with encouraging news and dipping when investors are more pessimistic. Such reactions are normal in asset markets of all stripes.

During the recent rate hikes, BTC’s average true range (ATR) has declined approximately 71%. ETH’s ATR has declined 52%.


Yet, the pattern has differed in one respect – BTC and ETH have displayed less volatility than traditional assets. Will that trend change? Will the latest robust interest rate hike on Wednesday jar markets?

In remarks following the Fed’s announcement, Chair Jerome Powell reiterated the bank’s months-long commitment to quell rising prices. But a Fed statement earlier in the day offered investors some hope that the present monetary hawkishness would end in the near future.

"In determining the pace of future increases in the target range, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments," the FOMC said.

The dovish signals are likely to send BTC and ETH higher, breaking them from their recent staid mode.

And asset managers will then surely – and wisely – take advantage of this likely upturn. A recent Commitment of Traders (COT) report showed that asset managers have increased their long positions in BTC while reducing their short positions. Asset managers’ open interest in BTC is now 88% long and 12% short, up from 84% long the prior week.

As asset managers generally hold larger sums of deployable capital, they have the ability to sway market prices with their activities.

Looking on-chain, the BTC Exchange Stablecoins ratio implies a sense of bullishness. The tool essentially measures the volume of stablecoins on exchanges to the amount of BTC present. As the ratio declines it implies growing buying power because investors generally move stablecoins on to exchanges prior to purchasing an asset.

Whether asset managers are picking the right price point to go long will play out over the next 12 months, but they appear to be ahead of the curve.



Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.

Glenn Williams

Glenn C Williams Jr, CMT is a Crypto Markets Analyst with an initial background in traditional finance. His experience includes research and analysis of individual cryptocurrencies, defi protocols, and crypto-based funds. He owns BTC, ETH, UNI, DOT, MATIC, and AVAX

Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.