Bitcoin’s price surge in the last 3 to 4 months has been exponential without a doubt. However, it is relatively less exponential when compared to the 2017 bull run. The 2017 bull run saw a 228% surge in 34 days while the current bull run has seen a 125% surge in 27 days.
The peculiar thing about bull runs like these is that there is no correction. As mentioned in a previous article, the recent crash was inevitable. This crash could either turn into a correction with the price preparing for the next leg up or a full-blown rejection into the bear market.
In fact, today’s drop was the second-largest drop since March 2020’s Black Thursday drop, which was 39%. A total of $2.74 billion positions were liquidated in the last 24 hours due to this drop.
Hence, a lingering question among investors is if this dip is worth buying/accumulating more bitcoin.
Buy the dip or let the price explore?
Addresses with 1,000 BTC have continued their ascent and shows no signs of stopping despite the recent drop. This shows that investors haven’t lost faith. Since December 2020, the addresses have grown 4%.
Source: CryptoQuant
With the ‘difficulty adjustment’ at a new ATH, it will tough for small-time miners to compete with the large-scale farms. If this were the case, then miners would need to liquidate their holdings, pushing the price further down. However, that will not be the case as this difficulty adjustment will cause small-time miners to shut down their farms leading to a drop in hash rate and an equivalent adjustment in difficulty in the future.
In addition, bitcoin has been in a bear market for over 3 years and it makes complete sense for the price to continue up and not go into a bear market like in 2019. However, the difference between this rally and 2019s is the flow of institutional money into bitcoin.
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