Bitcoin’s High Volatility Becomes A Surprising Magnet For Investors: Are Price Fluctuations The New Bull Rally?

Bitcoin Just Soared Back Above $60k As Market Rally Accelerates — Here Are 4 Reasons Why

Bitcoin as a very volatile cryptocurrency has been a cause of worry for so many Bitcoin proponents and onlookers.

Despite being the cryptocurrency with the largest market capitalization, and with more adoption rate than any other cryptocurrency at this time, Bitcoin still gives investors and traders reoccurring market scares, as prices continue to fluctuate by the second.

The logical strategy for some traders to employ when a bear market has been spotted, is to exit the market as fast as possible, by selling off their holdings, and anticipating the arrival of a new attractive entry point.

Bitcoin’s price fluctuations might just be the new bull rally

However, new data from Glassnode, has revealed that the times of incessant price swings have become one of the most attractive for traders who have begun monetizing the dip. In Glassnode’s most recent on-chain insight, it was discovered that there were two major types of investors and traders occupying the market at this time, the first of which are short term investors, who have capitalized on the profitability of the short term price swings to boost their profits.

As Glassnode writes :


“The high volatility of Bitcoin markets makes it a magnet for traders, who are able to monetise price swings in both directions.”

The adoption of bitcoin as a legal tender by El Salvador did a good job of riling up the bulls, which sent Bitcoin’s price higher. The upswing took place twice in the week, and swing buyers were just in time to make the most out of yet another buying opportunity.

“During both of these swings, the value held in profitable UTXOs jumped by around 1.5M BTC. Between both of these upswings, the weekly low of $31.7k to Sunday’s high of $39.2k, a total of 1.985M BTC returned to an unrealised profit.” revealed Glassnode.

Long term buyers remain committed to their values 

While swing buyers have fun with the volatility, long-term investors have avoided this strategy, which to them could be extremely dangerous.

Banking on the fundamental value that comes with Bitcoin, long-term investors remain unfazed by the turbulence, as they “hold on tightly”. Glassnode once again stopped their actions at this time, noting that “…the powerful fundamental properties of Bitcoin make it a desirable store of value asset for long-term investors.”