In a new report, digital asset research firm Delphi Digital has shared some trends that could help predict where the Bitcoin price is headed this month. While Bitcoin dipped more than 15% in roughly an hour last week, the cryptocurrency has since recovered from those lows below $8,000.
Delphi Digital laid out both bullish and bearish trends in their recent report. Additionally, the digital asset research firm pointed out that those who are bullish over the long term should be happy to see these lower price points.
“[Those] with long-term conviction in this asset class should welcome this pullback with open arms as it presents an opportunity to buy or add to existing positions at lower prices,” says the report.
The Good News
In terms of the reasoning behind Bitcoin’s multiple, sudden price drops last week, many of those who shared their opinions on Crypto Twitter were blaming Bakkt’s lackluster launch. However, Delphi Digital does not agree with that assessment.
“Many people seem to be disappointed in [Bakkt’s] launch but we believe a slow and steady increase in volume is much more likely as institutions and sophisticated investors become comfortable with the new product,” says the report.
The report goes on to illustrate how well Bitcoin has performed following a loss of 10% or more in a single day, which is what occurred last Tuesday. According to Delphi Digital, the Bitcoin price has risen 11% on average in the 30 days following a loss of 10% or more in 24 hours. The median return for this same scenario is 8.6%.
The average returns 7 days, 14 days, and 30 days after a 10% price dip are all better than the average returns on all other days. Obviously, it’s better to buy Bitcoin after the dip than before it.
On top of this bullish trend from the Delphi Digital report, a report from crypto prime dealer SFOX earlier in the year indicated a correlation between the holidays and upward swings in the Bitcoin price. According to SFOX, this correlation is strongest when the Bitcoin price is already rising before the holidays begin, as that creates a situation where FOMO (fear of missing out) can set in while everyone is with their friends and family for Thanksgiving, Christmas, and New Year’s Eve.
The Bad News
While the gains that usually follow a 10% drop in the Bitcoin price are worth considering, it doesn’t mean that Bitcoin’s downward price movement is over. On the very next page after covering the potential for an upwards price move, Delphi Digital laid out…
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