Bitcoin Investors ‘Buy The Dip’ As BTC Approaches $40K, Gaining 16% In Less Than 24 Hours

Buyers returned to the Bitcoin (BTC) market and spotted mid-term upside opportunities as the price bounced to nearly $40,000 on Feb. 25, gaining 16% in less than 24 hours.

Investors Increase Bitcoin Holdings

The number of Bitcoin addresses with balances above 0.01 BTC (~$400) reached an all-time high of 9.51 million, the latest data from CoinMetrics shows. Meanwhile, the number of addresses with at least 0.1 BTC (~$3,850) also reached 3.34 million for the first time in history.

Bitcoin addresses with a balance greater than 0.1 BTC. Source: CoinMetrics, Messari

Overall, Bitcoin’s network added just over 24,500 addresses with non-zero balances on Thursday, coinciding with BTC’s jerky price moves — from about $37,200 to below $34,500, followed by a recovery toward USD. 40,000.

Bitcoin on-chain accumulation trends. Source: Ecoinometry

Data source Ecoinometrics divided the addresses into two groups: one with less than 1 BTC and the other with somewhere between 1,000 BTC and 10,000 BTC, noting that both groups “bought the Bitcoin dip”. proverb

“Probably a smart move if you have a long investment horizon.”

BTC/USD hourly price chart. Source: TradingView

As the Ukraine crisis unfolds…

The prospects for higher inflation may also increase as the conflict between Ukraine and Russia leads to higher commodity prices worldwide, despite the US Federal Reserve’s preparations to tighten policy next month.

But Mohamed El-Erian, chief economic adviser at Allianz, said central bank officials would not continue their plans for aggressive rate hikes amid the deteriorating geopolitical outlook.

“This costs the 50 basis point [rate increase] completely off the table,” he said told CNBCadding:

“It takes the 8-9 hikes that people have been talking about for this year off the table. I don’t think the US economy can handle such a powerful monetary policy restraint. It means the Fed is even more cautious and tolerate inflation.”

MicroStrategy CEO Michael Saylor commented on the El-Erian Fed’s outlook, adding that the ongoing conflict between Ukraine and Russia could fuel inflation and “make Bitcoin attractive.”

Saylor’s company has more than 125,000 BTC worth about $4.84 billion in its treasury, according to Bitcoin Treasure Chests

Next Bitcoin Under $30K?

Despite Saylor’s upward outlook, which appeared after Bitcoin’s intraday rebound to $40,000, the market’s Fear and Greed Index score came in at 27, indicating some near-term unease among investors/traders.

Bitcoin fear and greed index. Source: Alternative.me

Nick, an analyst at Ecoinometrics, also noted that Bitcoin’s price could see a price correction below $30,000 despite a strong long-term upward outlook.

The reason cited is the imbalance between bearish and bullish positions in the Chicago Mercantile Exchange (CME) Bitcoin options market, which is leaning more towards the former.

Related: Bitcoin Exchange Volume in Ukraine Rises 200% as Russia’s War Causes Currency Problems

“The puts-to-calls ratio in the CME Bitcoin options market remains at three puts for every call,” he said. wrote in a report published Feb. 23, adding that “50% of puts are on strike” is now below $30,000.

“That gives you an idea of ​​what the market expects in the short term.”

The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Coin-Crypto.com. Every investment and trading move involves risks, you should do your own research when making a decision.

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