As Bitcoin’s (BTC) price experiences a decline, traders on the crypto exchange Bitfinex are demonstrating their penchant for buying the dip, offering a glimmer of hope for beleaguered crypto bulls. Their historical track record of accurately predicting market peaks and troughs adds weight to their recent actions.
The number of Bitcoin purchased on Bitfinex using borrowed funds—a strategy betting that the BTC price will rebound—has surged to over 60,000 BTC, up from 50,773 earlier this month. This figure has risen by 2% in the past 24 hours alone, according to data from Coinglass and TradingView.
This uptick in margin long positions represents a notable vote of confidence in the leading cryptocurrency, which has suffered a significant decline of more than 20% this month, putting it on track for its worst monthly performance since June 2022, as highlighted in a recent article.
Traders on Bitfinex predominantly consist of whales—individuals or entities holding substantial amounts of Bitcoin—who engage in margin long positions. Known for their ability to accurately signal the highs and lows of Bitcoin’s market cycle, they typically increase their holdings during downtrends or range-bound markets, mirroring patterns observed in mid-2022.
Over a five-year horizon, there is a consistent trend of these traders accumulating assets during price dips and reducing their exposure near market peaks. This pattern has been particularly evident during the market tops of 2021 and the current 2024 expectations.
As the cryptocurrency market experiences a downturn, sentiment is overwhelmingly characterized by extreme fear, according to the Crypto Fear & Greed Index by Coinglass. Notably, the past year has witnessed only four days of extreme fear, with the market predominantly reflecting greed and extreme greed for more than 230 days prior to this recent decline.
