Since Bitcoin hit its ATH, analysts and traders have been anticipating a price drop/correction before a prolonged price rally to buy some more. This is one of the popular upsides of the current price drop in Bitcoin and Ethereum.
Source: Coinstats
As Bitcoin and Ethereum’s price rallies retraced and the trend reversed momentarily, the ratio between BitMEX longs and shorts neutralized. This welcome change followed after several days of relatively high long levels. Since the neutralization, longs are no longer fueling the shorts, and those willing to leverage long into this dip no longer have to do so at unusually high premiums.
At the current price level, on BitMEX, the Bitcoin and Ethereum perpetual contract funding rates are either neutral or in the negative, so this could very well be the moment some bulls were waiting for.
Source: Santiment
This may have created typically the best entry points in 3 months for buying both these assets. Some on-chain analysts believe that the current pullback in Bitcoin is healthy, but it could be one of the last opportunities to accumulate at these low levels. $30,000 is cheap when traders take into account the fact that this could be one of the few drops before the price rallies to a new ATH, as predicted by S2F in August 2020.
The question is – Since it is likely that whales are buying and institutions are buying, are you buying? Retail traders who booked unrealized profits may have sold to whales and institutions buying the dip. Not long ago, when Bitcoin’s price hit its ATH, retail traders on Crypto-Twitter asked for a price drop below $30,000 to buy one last time before a long and more sustained price rally.
If you caught the Bitcoin dip to $31.1k in the early hours on Friday, you would have made a quick 4.5% return. Besides, institutions that bought the dip are profitable yet again, in the same market cycle.
Further, with Bitcoin prices continuing to decline, its social volume has exploded to 6-day high levels and traders are recognizing this as an opportunity to buy Bitcoin at its bottom. This may after all be the best time to buy before the price starts rallying onwards again.