Data from cryptocurrency analytics firm Santiment has revealed that after the cryptocurrency market downturn over the weekend, investors’ interest in buying the dip surged with mentions of the term “buy the dip” seeing their largest spike in three months on social media.
The firm shared its data with its over 114,000 followers on social media, before adding that renewed concerns associated with the COVID-19 pandemic among larger stakeholders “should tell the story.” Crypto prices, it’s worth noting, plunged over the weekend amid a wide market selloff that was seemingly triggered by an institution taking profit.
CryptoCompare data shows that the price of bitcoin plunged from a high near $57,000 to under $43,000 overnight before it started recovering. Reports suggest that an institution sold over $500 million worth of bitcoin, triggering “aggressive liquidations” in the crypto derivatives market, leading to the drop.
Per Santiment, after the drop prices started bouncing as more and more users showed they were buying the dip.
In another tweet, the firm pointed out that during the sell-off only three cryptocurrencies among the 100 largest by market capitalization weren’t in the red. These were Cosmos (ATOM), NEAR Protocol (NEAR), and DeFiChain (DFI). The firm noted that important factors to keep an eye on included pandemic-related fears and the ratio between investors buying more and short sellers.
Notably, the nation of El Salvador was among those buying the dip. According to its president Nayib Bukele, the country acquired 150 BTC at an average price of $48,670 during the market drop. As reported, Bukele even defended the purchase later on.
Last month, analysts at JPMorgan have published a deep dive into the cryptocurrency space and renewed in their analysis their $146,000 per bitcoin price prediction in the long run, if the cryptocurrency’s volatility drops and institutional investors prefer BTC over gold.
The analysts led by Nikolaos Panigirtzoglou revealed they see bitcoin as a scarce product that is increasingly competing with gold for investors’ preference as a hedge against inflation. Gold, they argued, failed to respond in recent weeks to heightened concerns over inflation, which is at a 13-year high in the United States and surge all around the world.