President Nayib Bukele tweeted that El Salvador has actually purchased the dip, adding 150 Bitcoin to its coffers to offer a cumulative holding of 700 tokens.
We just purchased the dip.
150 new coins!
El Salvador now holds 700 coins. #Bitcoin– Nayib Bukele(
— @nayibbukele )September 20, 2021 Buying the dip throughout afraid sell-offs is a technique common of
Michael Saylor and MicroStrategy. This has typically drawn criticism on the grounds of increasing his shareholder’s risk direct exposure. In dealing with these concerns, Saylor states that zooming out informs you everything you require to learn about his Bitcoin strategy. Nonetheless, with degrading macroeconomic conditions, might purchasing the dip this time be the incorrect move to make?
Bitcoin Takes A Beating The leading cryptocurrency reached a regional top of $52,600 on September 7, the day El Salvador’s Bitcoin legal tender expense entered law. Sentiment in the run-up to that day was positive as Bitcoin was riding an eight-week uptrend. There was even a price pump campaign to mark
the law passing with a collaborated$30 $BTC buy. Nevertheless, things didn’t go to plan, with a near 20 % swing to the downside when the Bitcoin law passed.
Some hypothesize prominent bodies deliberately tanked the rate of Bitcoin as a warning to El Salvador for going against the IMF and World Bank. So, on the precise day that El Salvador introduces Bitcoin as a legal tender versus the dreams of the World Bank and
IMF, mysteriously every single significant exchange decreases at the very same time as the rate crashes by 20%…– Ran Neuner (@cryptomanran)September 7, 2021 While$BTC did stage a return of sorts, peaking at$48,700 on Saturday, today has seen an 11%swing to the downside, stiring fears of additional dips to come. The sell-off bottomed
at $42,800 at 13:00 GMT. But with a flood of bad news on the macroeconomic front, specifically concerning Chinese residential or commercial property company Evergrande, might this relief rally
be short-term? Source: BTCUSD on TradingView.com The Elephant In The Room As much as Bitcoin is promoted as a hedge, past information reveals a high degree of favorable correlation with stocks. For example, March 2020
‘s stock crash was shown in Bitcoin as it fell 55%over six days
to bottom at$4,300. The 2008
financial crisis, while the outcome of lots of aspects, still had a tipping point in the collapse of Lehman Brothers on September 15, 2008. The bank was overexposed to subprime mortgage debt, leading to bankruptcy when mortgage defaults began to peak. Now, some 13 years later on, a comparable story is playing out with Evergrande, who deals with a liquidity crisis in not having the cash on hand to service its debts.” Evergrande deals with obligations of more than$300bn to creditors
and other services, and a vital interest payment deadline on its overseas bonds looms on Thursday.”What’s more, some analysts point out that the issues dealt with by Evergrande might spill out into international markets. For that reason, potentially being that single tipping point for a worldwide financial collapse. If that were to take place, how would Bitcoin, and the wider cryptocurrency
market, fare? The opportunities are, considering the interconnection through institutional investing and traders who trade both stocks and crypto; Bitcoin would also suffer. As such, purchasing the dip this time around, with so
much uncertainty looming, is brave, to state the least. For now, it’s all eyes on Evergrande to see how this situation plays out.