Greg Cipolaro, head of research at NYDIG, says, “our desk has been a net purchaser over the past 24-48 hours.”
He published this comment after Bitcoin went down from a unprecedented high beyond $64K in the past week to just above $51K on Sunday. The most well-known cryptocurrency was trading at $55,400 by midday.
However, despite this dip, Bitcoin has still increased 89% in value in 2021 so far amongst talk that large investors are utilizing it as a protection against inevitable inflation, following central banks and governments globally providing trillions of dollars in stimulus for their citizens.
Cipolaro said, “institutional investors have had a ‘buy the dip’ mentality during these risk-off events, suggesting increasing easy with handling Bitcoin’s volatility. We believe the root cause of the sell-off had to do with investor positioning rather than fundamental news. Simply put, traders were overleveraged and positioned long, resulting in forced liquidations.”
He also talked about the spot price discounts on Binance, especially when compared to Coinbase. “The difference in spot, which is usually very tight, reached nearly 3% at one point. To us, these data points are indicative of selling pressure in Asia, rather than North America.”