Turbulent Market Phase: Why Major Investors Are Now Systematically Buying the Dip

Institutional Confidence Despite Market Turbulence

The crypto market is experiencing one of its most volatile phases in months. Bitcoin temporarily fell below $75,000, while Ethereum lost over 20 percent in just one week ^[1]. Yet while many retail investors are unsettled, professional investors are demonstrating the exact opposite: They are systematically buying the dip. Cathie Wood's Ark Invest alone invested $9.4 million in Circle shares on Monday – right in the midst of a market selloff ^[3]. This contrarian strategy raises a fundamental question: What do institutional investors know that many retail investors are missing?

The Facts

Bitcoin's price recovered slightly after the weekend and is currently trading back above $78,000, after previously falling well below $75,000 ^[1]. However, the technical situation remains tense: With an RSI of 42 and trading below the EMA-20, the structure of lower highs and lows signals continued short-term downward pressure ^[1]. Analysts like Alex Thorn of Galaxy Digital warn of a supply gap between $82,000 and $70,000 and identify the range between $56,000 and $59,000 as a potential zone for bottom formation ^[1].

For altcoins, the situation is significantly worse: Ethereum lost approximately 21 percent on a weekly basis and is trading at $2,304 ^[1]. Solana is also struggling with a price of around $103, well below the EMA-20 ^[1]. The situation is particularly dramatic for Sui (SUI), which after a 20 percent correction within a week is on the verge of slipping below the psychologically important one-dollar mark ^[2]. The price currently fluctuates between $1.16 and $1.11 and is trading below the EMA-20 at $1.16 ^[2].

However, not all assets are following the downward trend. Hyperliquid (HYPE) is among the few outperformers, gaining 19 percent on a weekly basis to $33.25 ^[1]. The announcement of new prediction markets on the platform provided additional tailwinds and underscores the project's relative strength against the broader market ^[1].

While many market participants are unsettled, institutional investors are using the weakness for strategic positioning. Cathie Wood's Ark Invest invested a total of $9.4 million in Circle shares on Monday, even though the stock closed down 7.9 percent and had lost around 65 percent of its value over the past six months ^[3]. Additionally, Ark Invest secured shares in Ethereum treasury firm Bitmine for $6.25 million and in crypto exchange Bullish for $6 million ^[3]. Smaller positions in Block Inc. and Coinbase were also established ^[3].

A positive signal comes from the ETF market: Bitcoin ETFs recorded net inflows of approximately $562 million, ending a multi-day outflow phase ^[1]. This suggests that institutional investors are strategically using the lower prices for entries. Cathie Wood justified her optimism with a macroeconomic observation: "The gold price has led the last two significant bull movements in Bitcoin's price during the last two major cycles" ^[3]. The correlation between gold and Bitcoin has been 0.14 since early 2020 ^[3].

That even experienced investors make mistakes in the current market environment is demonstrated by the example of Arthur Hayes. The former BitMEX CEO sold positions in Pendle, Ethena, and Lido with realized losses of nearly one million dollars ^[4]. Hayes bought PENDLE for around $2 and sold at $1.50 (25 percent loss), acquired ENA at $0.23 and sold for $0.14 (nearly 40 percent loss) ^[4].

Analysis & Context

The current market movements reveal a fundamental difference between emotional and strategic action. While the technical indicators are undoubtedly bearish in the short term, the actions of institutional investors show a longer-term perspective. Ark Invest's contrarian purchases amid the market selloff are no coincidence, but follow a proven pattern: The largest gains are often made during the most pessimistic market phases.

Particularly noteworthy is Cathie Wood's observation regarding the gold-Bitcoin correlation. Historically speaking, gold has indeed functioned as a leading indicator for Bitcoin rallies in previous cycles. The current gold price rally could thus be a harbinger of a coming Bitcoin recovery, even though the short-term technical situation does not yet signal the all-clear. The inflows into Bitcoin ETFs of $562 million underscore that professional investors share this thinking.

The relative strength of projects like Hyperliquid also shows that the market is indeed differentiating. Not all assets are being sold off equally – projects with concrete product innovations and genuine user activity can escape the downward trend. Even with Sui, despite the price weakness, there is no fundamental weakness: The DeFi ecosystem is growing steadily, and Coinbase recently listed several Sui-related projects ^[2]. This underscores the discrepancy between short-term price noise and long-term fundamental value.

However, Arthur Hayes's example also illustrates the pitfalls of market timing during volatile phases, even for experienced investors. His realized losses of nearly one million dollars on Pendle, Ethena, and Lido show that even crypto billionaires are not immune to classic investor mistakes like premature entries or panic selling. The lesson: Strategy and discipline beat short-term market assessments.

Conclusion

• The current market phase separates emotional from strategic investors – institutional actors like Ark Invest are systematically using the weakness for contrarian accumulation, while retail investors often fall into panic

• Bitcoin ETF inflows of $562 million and the gold-Bitcoin correlation suggest that professional investors view the current correction as a buying opportunity, even though the short-term technical situation remains bearish

• The market is increasingly differentiating: Projects with genuine innovation like Hyperliquid show relative strength, while generic altcoins remain under pressure – fundamental analysis is becoming more important than pure market sentiment speculation

• Even experienced investors like Arthur Hayes are making costly mistakes in market timing in the current environment, which underscores the importance of discipline and clearly defined strategies

• The technical situation still requires caution: Only a sustainable breakout above the EMA-20 would brighten the short-term chart picture, while further downside risks to the $56,000-$59,000 zone exist for Bitcoin