Bitcoin investors ‘buy the dip’ as BTC nears $40K, gaining 16% in less than 24 hours

Buyers returned to Bitcoin (BTC), locating interim upside opportunities, as the price rose to almost $40,000 on February 25, and gained 16% in 24 hours.

Bitcoin investors increase their Bitcoin holdings

According to CoinMetrics, 9.51 million Bitcoin addresses had a balance of more than 0.01 BTC ($400), a new record. For the first time ever, 3.34 million addresses had at least 0.01 BTC ($3,850).

Bitcoin addresses that have a balance of more than 0.1 BTC Source: CoinMetrics and Messari

Bitcoin’s network added just over 24,500 addresses on Thursday with a balance of at least zero. This coincided with BTC’s volatile price movements — around $37,200 to under $34,500 followed by a recovery towards $40,000.

Trends in Bitcoin-on-chain accumulation Source: Ecoinometrics

Data resource Ecoinometrics sorted the addresses into two categories: the one holding less than 1 BTC and the one that holds between 1,000 BTC to 10,000 BTC. It noted that both groups were “buying the Bitcoin dip” and that they are not the same.

“Probably a smart decision if you have an investment horizon that is long-term.”

Hourly chart of BTC/USD. Source: TradingView
Ukraine crisis is unfolding…

With the Ukraine-Russia conflict, the possibility of higher inflation is also rising. This could lead to higher commodity prices worldwide, despite the fact that the U.S. Federal Reserve is preparing to tighten its policy next month.

Mohamed El-Erian is the chief economic advisor to Allianz. He stated that central bank officials will not continue with their aggressive rate-hiking plans despite the worsening geopolitical outlook.

He stated that the 50-basis point rate increase was now off the table.

“It removes the 8-9 hikes that people were talking about this year. I don’t believe the U.S. could tolerate such a reversal of monetary policy. This means that the Fed will have to be more cautious and tolerate inflation. “GOLDMAN SAGS: THINK GEOPOLIC UNCERTAINTY LOWERS THE ODDS FOR A 50 BPS HIKE MARCH
— *Walter Bloomberg (@DeItaone), February 24, 2022

MicroStrategy CEO Michael Saylor commented on El-Erian’s Fed outlook. He added that the ongoing Ukraine-Russian conflict could cause inflation and “make Bitcoin compelling.”

According to Bitcoin Treasuries, Saylor’s firm has over 125,000 BTC and a total of $4.84 billion in its Treasury.

Wars cause inflation and cripple commerce. This makes #bitcoin attractive. pic.twitter.com/YksI21FcXS
Michael Saylor (@saylor), February 24, 2022

Next, Bitcoin below $30K

Despite Saylor’s positive outlook that appeared after Bitcoin’s intraday surge towards $40,000, the Fear and Greed Index score of the market came out at 27, indicating a lack of confidence among traders and investors in the near future.

Index of Bitcoin fear and greed Source: Alternative.me

Ecoinometrics analyst Nick also pointed out that Bitcoin could see a correction below $30,000, despite a long-term positive outlook.

This is due to the inequalities between bullish and bearish positions on Chicago Mercantile Exchange’s Bitcoin options market (CME), which tends more towards the latter.

Related: Ukraine Bitcoin exchange volume spikes 200% as Russia war sparks currency concerns

He wrote that the CME Bitcoin Options Market puts to calls ratio remains at three puts per call. In a February 23rd report, he added that “50%” of the put are on strikes.

This gives you an indication of what the market is expecting in the near term. You should do your research before making any investment or trading decision.

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Eileen Wilson

Eileen Wilson –Technology and Energy My Name is Eileen Wilson with more than 5 years of experience in the Stock market industry, I am energetic about Technology news, started my career as an author then, later climbing my way up towards success into senior positions. I can consider myself as the backbone behind the success and growth of topmagazinewire.com with a dream to expand the reach out of the industry on a global scale. I am also a contributor and an editor of the Technology and Energy category. I experienced a critical analysis of companies and extracted the most noteworthy information for our vibrant investor network.

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