Bull or Bear? Investors Buy in During Bitcoin’s Dip
Is the market Bull or Bear? Investors are buying in during Bitcoin’s dip in price. The correction continues led by speculation around coin movement from an 11-year old wallet. About $80m worth of positions have been liquidated during the downturn but participants appear to be buying the dip. Open interest still sits at >$3b; long/short ratio @ 2:1.
More on the wallet activity; the coins were mined in ‘09 and inactive until a few days ago. While the market has come to a conclusion it’s NOT the act of Bitcoin creator, Satoshi, movement from old wallets still points to whale activity, and in this case, interpreted as a possible sell-off.
Another figure weighing on the markets is total hashrate, which continues to be stagnant at ~30% below the recent highs. Mining difficulty was adjusted down but 6% probably isn’t enough to get miners excited.
On a positive note, Summer is typically strong seasonality for mining in China due to cheaper hydro electricity costs. This could drive a significant amount of rigs to come back online.
You can actually speculate on mining difficulty on FTX with their newly launched Hashrate futures. The most clear use-case looks to be for miners to hedge against faster than expected rises in difficulty.
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