Large Bitcoin holders are the ones exerting power and buying the latest dip. This can be seen as a positive development that the latest correction is about to end.
In his daily letter to investors ‘The Pomp Letter’, Morgan Creek Digital’s Anthony Pompliano wrote that the so-called Bitcoin whales, those who hold between 10,000 and 100,000 Bitcoin, purchased 122,588 Bitcoin during the height of the market crash on Wednesday. This based on data from Glassnode. ‘Pomp’ reiterated the news to his Twitter followers on Sunday:
The on-chain metrics overwhelmingly show that new bitcoin holders are selling to the people who have been around for years.
Weak, new hands selling to strong, long-term hands.
— Pomp
(@APompliano) May 23, 2021
The news of the long-term ‘hodlers’ stacking up at a discount was further confirmed and shared by prominent players in the Bitcoin community.
Glassnode data was shared by Cryptoboom:
Long-Term Holders are stacking cheap #Bitcoin at these discounted prices. pic.twitter.com/AkDCTit4HL
— CryptoCurrency News (@CryptoBoomNews) May 23, 2021
PlanB also showed that the ‘weak’ hands who bought Bitcoin at price-levels near all-time highs capitulated under pressure and sold at a loss:
In the chart you see at what price level each of the total 18.7M BTC was last moved.
So what happened in May? Weak hands sold ~1M BTC in May at $30k-35k .. which they bought in April at $55k-60k: a staggering ~$20B loss. The good news: these 1M #bitcoin are in strong hands now. pic.twitter.com/bIXhil2LL7
— PlanB (@100trillionUSD) May 23, 2021
PlanB then confirmed Bitcoin is still within range of his Stock-to-Flow model:
Actual #bitcoin price is at the lower bound of S2F model. Am I worried? No. Lower band is ~/2, upper band ~*2:
– upper band: $120k
– model price: $60k
– lower band: $30k
It is not OK if we stay at $32K for multiple months, but I expect BTC price to bounce back next days/weeks. https://t.co/XvQybWBNds— PlanB (@100trillionUSD) May 23, 2021
Hedge funds buying the dip
Bloomberg have also confirmed that large hedge funds moved in and buying the dip. MVPQ Capital and ByteTree Asset Management, both based in London, along with Singapore’s Three Arrows Capital, all bought the dip.
Three Arrows Capital co-founder, Kyle Davies, has a positive outlook and said to Bloomberg:
“People that were borrowing money to invest, they were wiped from the system […] Every time we see massive liquidation is a chance to buy. I wouldn’t be surprised if Bitcoin and Ethereum retrace the entire drop in a week.”
Data revealed that one particular ‘whale’ who sold at a price of $58,000 has not only reaccumulated its holdings but added. The whale sold 3,000 Bitcoin on May 9 before buying back a total of 3,521 Bitcoin in three trades on May 15, 18 and 19.
As traders continued to test the limits of a new bearish range, Bitcoin price languished below $32,000 on Sunday for a while. At the time of writing price has recovered and is set just below $36,000 according to CoinMarketCap data.
The post Bitcoin moves from weak to strong hands as whales buy the dip appeared first on iGaming.
