Bitcoin Whales buy the blood as small time investors panic sell at a loss, push Bitcoin price into a new level
Bitcoin price recently saw a $ 2,000 correction following months of consecutive gains. In the early stages of the sell-off, take profit is the main reason for the pullback. However, after greed turned to fear, large investors began buying and hoarding BTC. This is why this action is in strong favor of BTC, fueling a new uptrend.
Bitcoin whales accumulate as small investors panic to sell-off
The crypto market has burst into flames in 2020, and although other small cryptocurrencies have consistently outperformed, Bitcoin is slowly going its way.
So far, Bitcoin is still the most profitable significant investment of the year besides gold, stocks, and anything else. But a recent crash of more than $ 2,000 turned the too greedy market into a terrifying one.
Many investment strategies recommend selling when the market is at its highest level of greed and then buying when the market is most fearful. That strategy has been proven to work over the past few weeks as the crypto market’s Fear and Greed Index hit record highs.
Early profit-taking traders caused an initial sell-off, as depicted by the moving average of green returns below.
Bitcoin Moving Profits and Losses | Source: Twitter
The profit-taking strategy has become proof of the fears and panic of people who cannot control their emotions and are selling their Bitcoins at a loss – represented by the red line that has just passed the color blue.
Note that in every significant crash, more investors sell at a loss than sell at a profit. Meanwhile, at each peak, investors are taking profits instead of panicking, dumping below.
But after such a sharp drop on dark Thursday and an ongoing bear market is not over yet with new higher highs, why would investors buy at still so high?
BTCUSD Weekly S/R Flip | Source: TradingView
What gives bulls such confidence to buy Bitcoin price when downtrend?
If the technical analysis patterns are correct, the bulls are right to buy the price down instead of selling at a loss. Those who sold at a discount may regret it and be forced to buy back at a higher price.
The surprise that gave the bulls confidence to buy on the recent take-off was that the resistance of the downtrend turned to support, along with the $ 10,000 level, which recently held hold on the timeframe daily and weekly.
If the critical level can also hold on to September monthly, chances are a new bull market has fully developed, and a re-test of all-time highs is only a few months away.