Buyers returned to the bitcoin (BTC) market, finding temporary upside opportunities when the price dropped to almost $40k on Feb. 25, gaining 16% in less than 24 hours.
Investors increase their holdings in bitcoin
According to the latest data from Coin Metrics, the number of Bitcoin addresses with a balance of more than 0.01 BTC (approximately $400) has reached a record 9.51 million. Meanwhile, the number of addresses containing 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: Currency Metric, Mysari.
In total, the Bitcoin network added just over 24,500 addresses with a non-zero balance on Thursday, coinciding with erratic BTC price moves from around $37,200 to just under $34,500, followed by a recovery against $40,000.
Trends in the accumulation of bitcoins in the chain. Source: environmental measurements.
The computer resource environmental measurement divided the addresses into two groups — one with less than 1 BTC and the other with between 1,000 BTC and 10,000 BTC — and noting that both groups “bought a bitcoin dip” and said:
“This is probably a smart move if you have a long-term investment horizon.”
Hourly BTC/USD price chart. Source: Trading View
With the development of the Ukrainian crisis…
Expectations of higher inflation could also pick up as the conflict between Ukraine and Russia sent global commodity prices up even as the US Federal Reserve prepares to tighten policy next month.
But Mohamed El-Erian, chief economic adviser to Allianz, said central bank officials would not pursue their aggressive rate-setting plans amid a deteriorating geopolitical outlook.
“That completely takes the 50 basis points [rate hike] off the table,” he told CNBC, adding:
“This year, eight or nine raises that have been discussed this year should be eliminated. I don’t think the US economy can afford to let the brakes on monetary policy swing like that. This means the Fed needs to be more cautious and fight inflation. .”
Michael Saylor, CEO of MicroStrategy, commented on El-Erian’s view of the Fed, stating that the ongoing conflict between Ukraine and Russia could lead to inflation and “disguised bitcoin production.”
Sailor has over 125,000 BTC worth about $4.84 billion in treasury, according to Bitcoin Treasury Securities.
Bitcoin below $30,000?
Despite Sailor’s upbeat outlook following Bitcoin’s intraday bounce to $40,000, Fear & Greed’s market result was 27, indicating confusion among investors and short-term traders.
Fear and greed of bitcoins. Source: Alternative.me
Nick, an analyst at Ecoinometrics, noted that the price of bitcoin could correct below $30,000 despite having a strong bullish outlook in the long term.
The above reason is the imbalance between bearish and bullish positions in the Chicago Mercantile Exchange (CME) bitcoin options market, which leans more towards the former.
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“The buy-to-call ratio of the CME bitcoin options market remains at three pips per call,” he wrote in a report released Feb. 23, adding that “50% of put-to-strike buys” are currently under 30,000 dollars. .
“So it gives you an idea of what the market is expecting in the short term.”