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19.03.2024 09:17 PM
Bitcoin: is the bullish trend over?

In the past few days, the cryptocurrency market has been shaken by a sudden correction. The liquidation of positions totaling over $622 million became a source of significant selling pressure, sparking considerable interest in whether this is a sign of the end of the bull market or just a temporary correction.

Wave of Liquidations

Over the last 24 hours, positions worth more than $500 million in cryptocurrency have been lost, sharply driving down prices in the market. This has prompted many investors to contemplate the future of their investments, wondering how long the correction will last.

The recent cryptocurrency price drop has shocked everyone, especially considering that the market seemed invincible not long ago. Bitcoin lost over $107 million, indicating a shift in investor confidence from a bullish to a bearish trend.

Moreover, many did not anticipate such a significant correction. When it seemed that Bitcoin had stabilized above the $70,000 mark, the market sharply declined, and now it is barely holding above $63,000.

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Market Alarm

This prolonged correction is causing concern in the market as investor sentiment has shifted from optimistic to cautious, and sometimes pessimistic. It was expected that the market would hold around $70,000, but the current correction has become an unexpected and alarming phenomenon.

Many were caught off guard by these fluctuations. During this time, investors are advised to exercise caution and maintain liquidity, considering the possibility of a trend change. Focusing on the long-term perspective rather than short-term fluctuations may be a more successful strategy for overcoming these unexpected market movements.

In addition to Bitcoin, major altcoins such as Ethereum and others have also suffered significant losses. The price of Ethereum dropped to $3,261, and Solana to $177. The biggest loser of the day was FRONT: the cryptocurrency's price fell by approximately 45%.

Forecasting the movement of both BTC and other cryptocurrencies is becoming increasingly challenging, especially considering that the Federal Reserve is likely to become a key factor this week.

Despite the chaos, there is hope for recovery.

The market has shown signs of potential recovery, mainly due to growing interest in Bitcoin ETFs. Just last week, these funds attracted over $2.5 billion in new investments, indicating the beginning of a bull market supported by institutional investors.

This phenomenon, known as institutional FOMO (fear of missing out), shows that large players still believe in the future of Bitcoin. The average price at which Bitcoin is acquired by new institutional investors is $56,400, mainly through spot ETFs. Those who purchased shares earlier paid around $21,300.

If the price of Bitcoin can hold above the key level of $56,000, there is a chance for recovery and possibly a new all-time high. According to Richard Teng, the current CEO of Binance, optimism still prevails. Teng predicts that by the end of the year, Bitcoin could surpass $80,000.

MicroStrategy Buys the Dip

While the price of Bitcoin may fluctuate in recent days, for some investors, this is not a problem. For example, MicroStrategy took advantage of the price drop to purchase an additional 9,245 BTC for approximately $623 million.

The purchase was announced by Michael Saylor, the company's CEO. He noted that the transaction was funded by proceeds from convertible notes and excess cash.

MicroStrategy recently completed the sale of convertible notes totaling over $1 billion, directing the proceeds to acquire even more of the underlying cryptocurrency.

Earlier this month, the company utilized this initiative to purchase 12,000 BTC for $800 million. The company's total holdings of 214,246 BTC are valued at over $13.5 billion (at current rates).

This reserve was acquired for approximately $7.5 billion at an average price of $35,160 per Bitcoin, meaning that MicroStrategy currently has a profit of about $6 billion (at least on paper).

The deal to acquire an additional 9,245 BTC demonstrates that even amidst market instability, MicroStrategy continues its strategy of actively investing in cryptocurrency.

This also underscores the company's confidence in the long-term potential of Bitcoin and other cryptocurrencies as assets capable of preserving and increasing capital.

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