Bitcoin Drops Below $98K—Is This the Perfect Buying Opportunity for Investors?
Bitcoin, the leading cryptocurrency by market capitalization, has recently experienced a large and sudden price correction, sparking debate among investors.
People are worried about whether this recession heralds The end of the current bull market cycle Or simply represents a temporary setback.
As CryptoQuant’s Avocado Onchain analyzed in a recent report, while short-term holders face losses, long-term indicators provide a broader perspective on Bitcoin’s trajectory. Report.
Opportunity or the end of the bull market cycle?
According to data from Avocado Onchain, the actual price for investors entering the market during Bitcoin’s recent peak was $98,000 quota They are in a loss-making position.
However, for those who invested one to three months ago, realized price Significantly below $71,000, providing a buffer for the current correction.
Avocado noted that the historical pattern of Bitcoin’s 2021 bull cycle reveals a similar alternation between all-time highs and sharp pullbacks, suggesting that these declines may not necessarily signal the end of the cycle. Rather, they have historically been “opportunities” for market rebalancing and subsequent growth.
A key metric analyzed is the 30-day moving average Short-term SOPR (expenditure output profit margin). This indicator tracks whether market participants have recently sold at a profit or loss.
Current SOPR data shows that recent short-term inflows into Bitcoin have not yet resulted in significant profit-taking. Unlike previous cycle peaks that were characterized by aggressive selling, the current correction appears to be milder, suggesting the market may still have room to rise.
Bitcoin’s short-term decline and long-term trend
Additionally, the Avocado Chain highlights the importance of distinguishing short-term corrections from broader cyclical trends. Bitcoin Trends rebound after adjustment Past bull cycles have reinforced the idea that the current downturn may not mark the end of the cycle.
These insights are consistent with the behavior of long-term holders, who often use corrections to consolidate their positions, thereby increasing the market’s resilience.
Avocado summarized the analysis, stating:
For investors who are yet to enter the market, this could be a great opportunity to buy Bitcoin at a discount. Rather than succumbing to panic selling during short-term downturns, taking a longer-term perspective and a dollar-cost averaging (DCA) strategy may be a more effective approach.
At the time of writing, Bitcoin price has gradually rebounded, surging 1.3% in the past hour. Regardless, the asset still appears to be overshadowed by bears, as BTC remains down 3.5% over the past day and is down 10.5% from last week’s peak of $108,135.
Featured image created using DALL-E, chart from TradingView
