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Bitcoin’s falling: Time to buy?

Photo of: Joseph Stone
by Joseph Stone

The panic of new investors accentuated the fall in the price of BTC. Long-term holders, on the other hand, are accumulating, like MicroStrategy.

The Bitcoin investor market can be divided into two broad categories. The first, the newcomers, sell in panic and at a loss during a correction, at the risk of accentuating it.

This is what happened last week, as Glassnode noted. The second category includes long-term investors. And unlike the former, they have not liquidated their BTC. Instead, they would tend to take advantage of the falling price to acquire more bitcoins.

This is clearly the strategy adopted by MicroStrategy. As soon as Elon Musk’s first tweets, and the cryptocurrency’s initial plunge, the publisher invested $15 million. Bitcoin is now stagnant at $42,000.

So the price is low, equivalent to what it was a few months earlier. It’s a bargain, considers the American Bitcoin whale. So MicroStrategy is doing it again, applying the strategy of buying at a low.

On May 18, its CEO announced the purchase of 229 additional Bitcoins, representing a cash investment of $10 million. This transaction has an average price per Bitcoin of $43,663.

The U.S. firm now holds approximately 92,079 Bitcoins acquired for nearly $2.251 billion, or an average price of $24,450 per BTC. Despite the current price of $43K, the investor is still a big winner.

It also sends a strong signal to the market and confirms the trend observed by Glassnode. Thus, “large buyers remain in active accumulation during this correction. “In fact, the number of addresses in accumulation has increased by 1.1% since the recent low.

Not all are adopting this strategy, however. Square, for example, which has spent more than $200 million buying Bitcoin, says it does not intend to make any further purchases at this time.

Other opportunities may arise, however. For analyst John Bollinger, the current price of $43K is “logical”. According to him, “~$43,000 is what we call a logical level for the $BTCUSD. It is defined by the January high and the March low”.

Furthermore, the price of the crypto-asset could retreat further. Carter Worth, chief market technician at Cornerstone Macro, indeed believes that the decline could continue. A decline in the price of BTC to $29,000 is not out of the question.