Buy the Bitcoin Dip? Not Until Short-Term Holders Show Gains, Says Compass Point
Analysts at Compass Point advise caution in betting on Bitcoin before it surpasses $98,000, the average cost for short-term holders. Recently, Bitcoin reached a high of $97,500 but failed to break this threshold, raising concerns of a continued decline. Historically, bear markets in Bitcoin feature strong rallies followed by sharp sell-offs. Bitcoin dropped to $87,900 amid market jitters, erasing a month’s gains. While long-term holders have stabilized their holdings at 14 million Bitcoin, short-term holders remain sensitive to volatility. Compass Point may consider buying if the price dips closer to $80,000, but notes that high funding rates for futures indicate significant leveraged buying, increasing the risk of forced liquidations if prices fall further. Although Bitcoin recently exhibited a bullish “golden cross,” this signal has now been reversed. Market sentiment is described as extremely negative, compounded by the strong performance of traditional safe-haven assets like gold and silver.
