Bitcoin whales continue to rely on the “buy the dip” strategy to increase their long-term positions. After the BTC price plunged to $34,700 following Russia’s invasion of Ukraine, whales made massive purchases.
According to the blockchain analytics company Santiment, the number of transactions above $100,000 and $1 million reached the highest level since January, 24th. Demonstrating the high likelihood of an accumulation upsurge.
Historically, whales’ purchases largely influence the prices and capitalization of the crypto market. For instance, the past case of immense purchases at the end of January resulted in a 15% growth in the BTC price. Santiment’s analysts expect a similar dynamic to occur in this case as well.
On one hand, large purchases have a direct impact on prices and change the implications of technical analysis. On the other hand, market participants and traders monitor whales’ behavior as they have extensive access to broader markets and financial resources. Thus, most traders tend to follow whales’ approach as they believe that the strategy identified by them may prove to be valid.
The above logic implies that the price dynamics of the quarter will be the effect of the “buy the dip” strategy. Bitcoin bulls may be able to uphold price at $40,000 if the same dynamics as at the end of January persists.
Long-term price movements will depend on the major impact of essential factors. If such fundamental factors are positive in regards to Bitcoin’s dominance and the general crypto market, the appreciation may continue further. Otherwise, a new wave of price declines, and lower volumes of purchases may follow later.
The major factor that will affect the realization of one of these strategies is the situation in Ukraine driven by Russia’s military aggression. If the conflict is resolved with the restoration of Ukraine’s control over its territory, Bitcoin may soar further with the formation of a new bullish wave. Otherwise, bearish concerns may prevail again with negative consequences for all major cryptocurrencies.
Currently, the price channel of $35,000-$45,000 continues to be stable, determining the horizontal correction of Bitcoin. When this channel is broken in either direction, further price changes can be reliably expected. In any case, whales’ behavior and purchasing decisions are reliable indicators of price movements in the short run.