Bitcoin rises 9% in few hours after low, volatility increases. What is going on?

Last Updated: 1 July 2022

Last night at 23:00, the bitcoin price fell hard and was even worth less than 18 thousand euros for a while. But bitcoin wants to enter the holiday season with a good feeling, and in the dead of night, the value rose by 9% within a few hours.

Asia wakes up

Looking purely at the times, the rise seems to have been caused by traders waking up in Asia. The peak was reached at 02:45 Dutch time, and then, in the main parts of financial Asia, between 8 and 10 am.

At the red dot in the chart above, bitcoin was briefly worth 17,900 euros. This price has not been seen since December 2020 and is a great opportunity for traders and investors to take a position.

MicroStrategy buys 480 bitcoins

One of these investors is Michael Saylor. His company, MicroStrategy, is listed in the US, which means that every investment must be disclosed. For the newcomers among us, MicroStrategy has used the treasury several times to buy bitcoin, and they have also taken out loans to buy even more bitcoin.

Saylor revealed via Twitter that his company bought 480 bitcoins for 9.55 million euros ($10 million). Each bitcoin was bought at an average price of 19,883 euros (20,817 dollars) which means he is already in the minus with his latest purchase. Anyway, MicorStrategy has almost 130 thousand bitcoins under management.

3.8 billion worth of bitcoin

The company has spent a total of 3.8 billion Euros (almost 4 billion dollars) buying bitcoin. Per bitcoin, MicroStrategy has paid an average of 29,269 euros (30,644 dollars). Hopefully he will have enough money to buy the dips in the bear market to lower the average purchase price.

The latest purchase raised several eyebrows because it took place at a time when the crypto market is suffering from a lack of confidence. It may be warm outside, but the bears have lulled the prices into a long hibernation.

While the critics were making themselves heard, Changpeng Zhao, CEO of Binance, defended Michael Saylor’s purchases. He noted that the decision to buy more bitcoin would be beneficial in the long run.

Trend of accumulating

Michael Saylor is not the only wealthy stinker lining his pockets with cheaper bitcoins. Looking at the blockchain data (this is called on-chain data), we can see an increased level of buying activity.

In particular, addresses with more than 10,000 BTC and strangely enough addresses with less than 1 BTC have added to their balance in June. This can be seen in the “Accumulation Trend Score” statistics, which returned high values above 0.9 throughout the month.

The market turmoil has caused investors to withdraw their bitcoin from the various exchanges in droves. This could indicate that the price is going to rise, as there are fewer bitcoins ready to be sold, but it could also mean that investors have wised up and would simply prefer to keep bitcoin in their own hands. Especially after the conditions of various exchanges (and lending protocols) since May do not exactly exude much confidence.

According to data from the on-chain analysis company Glassnode, around 8,755 bitcoins, worth more than 175 million euros, have been withdrawn from exchanges in recent days.

Author

  • Steven Gray is a journalist with a heart for crypto. He filters the wide range of news and ensures that it reaches the public in a comprehensible way. He often does this with the support of technical analysis.

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