Buying coins has now become a ritual as soon as the price of Bitcoin drops and there are many banks in bringing back the king coin when it is at its lowest point. Looking at the coin’s fall in December and January, an investor might wonder if the trend will continue. Data from a Santiment report sheds light on what may really be going on.
It’s all in your feelings
Santiment has tracked social volume and the dominance of “buy down” or “buy down” calls to show that most people made good calls before Bitcoin hit its lowest price in history. December 2021 and January 2022.
Source: Santiment
However, the dominance of this trend has been declining since the beginning of January, while Bitcoin price gradually started to see some upside momentum. This suggests that the “buying down” trend may be coming to an end.
That said, just looking at social indicators is not enough. After all, the movements of Bitcoin itself can reveal a lot about investor behavior and trends. For example, the velocity of the king coin has plummeted since December 6. Although there have been some smaller spikes after that, the velocity has remained below 0.035. This means that coin activity has dropped significantly and, in turn, shows that the “buy and sell” crowd has thinned.
Source: Glassnode
Also looking at circulation and exchange flows for USDT and DAI, the Santiment report states,
“The crowd is showing signs of losing interest in the market. Those who wanted to get out, they did it. Those who have decided to hold are actually holding.”
Another factor to consider is how much Bitcoin is HODLed – or lost. Glassnode data shows that the amount of coins in this category has consistently hit 1-year highs. Assuming that more coins are being HODL-ed than are being lost, this again signals that Bitcoin holders are holding on rather than selling.
📈 #Bitcoin $BTC The number of HODLs or coins lost just hit a 1-year high of 7,287,363,609 BTC
View index: https://t.co/dJK8rxBVD3 pic.twitter.com/t5Fx3iohNW
– glassnode warning (@glassnodealerts) January 16, 2022
Nayib said no
El Salvador’s Twitter-savvy President Nayib Bukele is often one of the first to notice when Bitcoin slips. However, the Central American leader has announced that he will not buy the price drop in January 2022.
I think I might have missed this dip
– Nayib Bukele (@nayibbukele) January 14, 2022
This led to some teasing from TRON founder Justin Sun, who smugly claimed that he had scored some BTC at $40,000.
I bought 100 #Bitcoin at $40,000 You missed your chance! 😆https://t.co/SmkIO74Gw9
– Sir Justin Sun (@justinsuntron) January 14, 2022
At press time, the price of Bitcoin is $42,842.72 and the king coin is up 2.29% over the past seven days. However, the market is shaking in a mood of extreme fear.