No fear over recent Bitcoin correction, just “buy the dip”

With $6 billion worth of Bitcoin options set to expire this Friday 26th, we have seen the price of Bitcoin record a 6% correction on Monday with a daily low of $53,470 falling from a daily high of $58,471. This drop of $5,000 in value of the coin created fears of further downside among traders and news of a possible bearish break on the current bull run broke out.

However, on-chain analyst Ki-Young Ju pointed that the Fund Flow Ratio of Bitcoin on all exchanges is around 7% which is considerably low, given the fund flow has exceeded 16% in March last year when the price fell by 50%. This indicates that most of the transactions occurred outside the exchanges. In addition, another on-chain analysis showed that while smaller whales have started to take a profit, the big whales in the range of 100 BTC -1000 BTC are still accumulating.

So should we be concerned about the recent dip?

No, we should keep our cool and not start to panic over a correction of just 6%. The price of Bitcoin has recorded major corrections of nearly 20% on more than one occasion at least once over the past three months and look where we are today.

We are seeing a greater adoption of Bitcoin than ever before with more active Bitcoin addresses than ever. According to data from Glassnode, the number continued to grow at a parabolic rate. Last Friday it reached a record high of 36,896,000 addresses.

This shows once again that more and more people own Bitcoin and that cryptocurrency and blockchain are becoming increasingly more mainstream. With more interest from consumers, institutions and companies in crypto than ever before, it is only a matter of time before we reach to new heights. 

Going back to the $6 billion Bitcoin options that are set to expire this Friday, such event has historically led to price volatility a week before. The expiry of these options is considered a bullish signal with the price spiking after as Wall Street traders rush to buy more contracts once the options have expired.

We are still on schedule to reach highs of over $100,000, even up to $300,000 this year as per the historically accurate PlanB’ Stock to Flow models that so far has been spot on with Bitcoin even overperforming to his models.

News of a possible new Biden stimulus package has also come out today, which usually is good news for Bitcoin. According to White House sources, the U.S. government is considering a to boost infrastructure, clean energy, childcare, and education with a plan fueled by another stimulus package of roughly $3 trillion.

Jen Psaki, White House press secretary, said the following on Twitter on Monday:

“Relief is headed out the door thanks to the American Rescue Plan, and @POTUS is focused on building our economy back better, and ideas he talked about on the campaign trail, from investing in infrastructure to caregiving to making sure the tax code rewards work and not wealth,”

She added that:

“[His] focus will be on jobs and making life better for Americans. He considers a range of options, scopes, and sizes of plans and will discuss with his policy team in the days ahead. Still, speculation is premature, given @POTUS does not plan to layout additional details this week.”

Such immense cash injections, together with the ongoing money supply from the Federal Reserve, expect to increase inflation, and pushes interest for hedging assets like Bitcoin. Furthermore, the U.S. central bank stated that it will allow inflation to rise above the 2% levels and will not introduce any changes in interest rates.

We are probably looking at a great opportunity to add some more Bitcoin to our totals right now, with the bull-run undoubtedly set to continue after this slight correction. Or as Ki-Young Ju said:

“This bull-run isn’t over yet. I’m ready to buy the dip,”

Recent Posts

Revolut brings eleven new Crypto assets to its platform

On Thursday, London-based digital payments firm Revolut announced that it had just added eleven new crypto assets to its banking…

7 hours ago

Ripple’s XRP is skyrocketing as the team celebrates three wins in a row in its SEC lawsuit

This Friday, U.S. Judge Sarah Netburn granted Ripple’s motion to keep its CEO’s financial records private after the Securities and Exchange Commission…

2 days ago

SEC’s Crypto Mom is calling for the U.S. to catch up and considers a ban on Bitcoin foolish

According to Hester Peirce, an American lawyer and Commissioner at the US Securities and Exchange Commission (SEC), a government ban…

2 days ago

Bloomberg expects Bitcoin price to land on $400,000 in this halving cycle

In the latest edition of its monthly “Crypto Outlook,” Bloomberg, senior strategist Mike McGlone reports on the bullish narrative around bitcoin…

2 days ago

Coinbase high valuation is not a “done deal”, as analysts issue some caution ahead of its direct listing

Looking ahead to next week’s Coinbase direct listing, analysts conclude that by no means it is a “done deal” game…

2 days ago

Bitcoin’s adoption is at a “tipping point”, according to Fidelity Investments Executive Tom Jessop

During an interview at Marketwatch and Barron’s “Investing in Crypto” event, Tom Jessop, Head of Fidelity Digital Assets at Fidelity…

4 days ago