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Morgan Stanley analyst Sheena Shah said in a note to clients on Friday that Bitcoin’s current resilience suggests some traders are buying dips below $18,000.
“Bitcoin has traded in the tightest $ range since late 2020, despite volatility in other markets,” Shah said, adding that “stability suggests some traders are buying dips below $18.5k to prevent that BTC falls materially below its previous 2017 cycle high.”
Shah believes that most who bought Bitcoin in 2021 are “facing heavy losses and appear to be waiting for rallies to close their position” as it is almost a year into the Bitcoin bear market.
“A record number of bitcoin units have not been used in any transaction in the past 6 months, currently at 78% of the total, and that number continues to rise.” What this means, if we oversimplify it a bit, is that those who bought /received bitcoin more than 6 months ago are holding their positions with some likely waiting for a price rally. For the remaining 22% of bitcoin units held by the shorter-term investors who traded bitcoin over the past 6 months, estimates suggest their average breakeven price is just over $22.3k,” he wrote analyst.
Shah also revealed that trading volume is falling on most exchanges except for the largest, Binance, after the company cut bitcoin trading fees to zero in July to increase market share.
By Sam Boughedda
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
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