By Yasin Ebrahim
Investing.com – Bitcoin's slump Thursday was blamed on hedge funds rebalancing their portfolios ahead of the quarter-end, but the selling to $50,000 found support at time when signs pointing to the strength of the long-term 'hodl' rose to a record high for the year.
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BTC/USD fell 6.27% to $51,993.
Net flows from/to exchange bitcoin exchanges – the difference between the amount of bitcoin moving on versus off exchange – fell to a record low for the year, suggesting the move from exchanges to private wallets – a long-term demand indicator – continues to accelerate.
Net flows from/to exchange bitcoin exchanges fell to -1,250 clusters on Thursday, data from on-chain analytics Glassnode showed.
Signs pointing to the strength of the long-term 'hodl' come as hedge managers -- who have been forced to look in risker corners of the market like cryptocurrency or high-growth stocks in search of returns -- are expected to have to tweak their portfolio allocations ahead of the quarter-end, shedding some of their riskier assets.
Bitcoin is expected to be one of the victims of the portfolio rebalance, or tweak as managers attempt to move closer to 60% to 40% bond-equity allocation.
On-chain data also added credence to a portfolio shakeout from larger bitcoin holders as the bitcoin whale index, measuring the number of bitcoin addresses with at least 1,000 bitcoins, dropped 10% from its recent high of about 2,500 clusters.
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