Investors Buying Bitcoin Amid Price Slump to Near $10K, Data Shows

Despite significant losses for bitcoin since mid-August, the "buy the dip" mentality in the crypto markets is still strong, blockchain data suggests.

While the cryptocurrency has declined from $12,400 to $10,000 in the past three weeks, the number of "accumulation addresses" has increased by 2% to 513,000, according to data source Glassnode.
"Lots of new daily buyers are coming in to absorb supply," Su Zhu, CEO of Singapore-based Three Arrows Capital, told CoinDesk in a Telegram chat.
Accumulation addresses are those that have at least two incoming non-dust transfers (representing minuscule amounts of bitcoin) and have never spent funds.
The metric excludes addresses belonging to miners and exchanges, and addresses active more than seven years ago to exclude lost coins.

The divergence between prices and accumulation addresses suggests that investors view the recent price drop as a typical bull market pullback and expect prices to rise once more.
"Markets typically retrace one third or more in a bull market after local euphoria," Zhu tweeted on Friday, suggesting prices could drop to as low as $8,800 and still be a "healthy target."

Bitcoin fell by over 10% on Thursday, confirming a head-and-shoulders breakdown – a bearish reversal pattern – and a violation of the six-month-long bull market trendline.
Usually, such patterns invite more substantial chart-driven selling, yielding deeper price declines.
So far, bitcoin has managed to defend the $10,000 support – possibly a sign of an underlying bullish tone in the market.
"I am flabbergasted by the strength shown at $10,000, and it probably means $100,000 is more likely than $5,000 at this stage," Zhu said in another tweet.
At press time, bitcoin is changing hands near $10,117, representing a 1.59% decline on the day.

Also read: Crypto Long & Short: What Investors Get Wrong About Volatility (and Not Just for Crypto)

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Omkar Godbole

Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.