Whales bought the dip when Bitcoin crashed last Monday

A week once again seems like an eternity as Bitcoin’s volatility from 2020 and 2021 is back this summer. The ‘Black Monday’ crash seems to have been fully recovered as the largest digital coin climbed more than 20% in just a few days.

Negativity gave way to hope as it becomes clear that whales only did one thing during last weekend’s panic: buy the dip. If they think the price can only go higher, should you do the same? We briefly explain the current price dynamics for Bitcoin.

Whales bought the highest #Bitcoin ever since Oct 2014 🤯 pic.twitter.com/pevveFQX2P

— Vivek⚡️ (@Vivek4real_) August 9, 2024

Central banks

Ever since the introduction of the Bitcoin ETFs at the beginning of this year, it is clear that the investment functionality of crypto has changed. Now that institutional investors are also venturing into it, Bitcoin is no longer seen as a ‘safe haven’, but rather as a ‘risk-on’ asset which moves in line with tech stocks.

This was clearly visible when the Nasdaq tech stock market fell in early August and Bitcoin followed suit. After the so-called ‘Black Monday’ crash in Tokyo, those tech shares fell very quickly, and Bitcoin followed into the abyss. From $70,000 at the end of July to $50,000 a few days later. Volatility.

A further consequence of this is that central banks and their interest rate decisions have become even more important. In order to combat inflation, the Fed, the ECB, the Bank of England and recently even the Bank of Japan have systematically raised interest rates in recent years.

Inflation now seems to be under control and so investors are waiting for a first signal from the Federal Reserve that those damn high interest rates (which are slowing down the economy) can finally come down in the next few months. Until that signal comes, every bad data point (last Friday’s jobs report in the United States for example) is a trigger for investors to reduce their risk positions. However, this also means that Bitcoin’s price from now on partly depends on the American economic outlook.

The real safe haven is once again gold, which remained extremely stable last Monday, but has hardly moved since then. Gold, cash and government bonds if you want to avoid risk, Bitcoin and tech shares if you prefer risk. With the first group you lose less, with the second group you win more.

Growth

Yet there is also good news, because it is remarkable to see that more and more billionaires, investment funds and even large companies are starting to see the usefulness and future possibilities of Bitcoin after all these years. The large number of fans that Bitcoin has amassed in 2024 as well as the fact that it is a topic during the presidential elections is hopeful for the future and makes us dream of further growth.