Topic: Can the average buying of some companies be considered a sign of the bottom? (Read 248 times)

You have a point however the companies that have bought bitcoin and do so in big quantities basically have done so to use bitcoin as a hedge against inflation, while selling small amounts of bitcoin can make sense in order to do some movement or acquire more capital for their operations selling a large amount of their stash will go against their stated purpose.

I think that if the price was crashing and they were given two options whether to buy more or sell their stash most likely they will make the calculation that it is on their best interest to reduce the impact of the crash and buy more in order to stabilize the market and protect their holdings that way than to sell everything they have and add more fuel to the fire.

They will sell at one point obviously otherwise it doesn't make sense to buy it in the first place. They will all sell within this year? I do not agree because different investors and companies have different mindsets and strategies about divesting their investments. Also if everyone sells at the same point, no one actually benefits as the market gets shut down completely.

I suggest we must stop making theories when the price is pumping because we already made enough theories when the price was dumping, so we need to calm down and appreciate the growth we have seen this year. Just sell when you feel that the price is higher than the value of bitcoins, if you understand what I mean.

Not a sign or symptom but the first wave of an impending disaster. Don't want to be the pessimist guy in here or the doomer boy but as OP have mentioned, these guys will sell at some point, probably later this year, and when that happens, us small time investors will be the one to take the beating of a lifetime, and capitalism wins yet again.

Why wouldn't you agree, that will be their endgame, its just that it will take a long time before they are going to sell their bitcoin, the stocks that you are talking about are constantly traded around the market so you can't really say that they hold the same stock for decades, how is it supposed to make money if it were to stagnate there. They will eventually have to sell their bitcoin, its not like stock where it gives dividends and interest. Buying is not the only move for this companies because the money that they use to buy these bitcoins are the money of their investors so they need to make it grow so they can take their part in it and make their investors get rich.

If one checks the news and the bitcoin data from a year ago, one can realize that there were certain movements that presaged a terrible year for bitcoin, in fact at a certain point it was below $ 10k in the month of March (2020) , but it is well known how bitcoin held its price in 2020. But that year had several institutional investors, who from my point of view have come to stay for a longer time, they themselves between the lines have said that they are going to keep bitcoin above 50k.

The point is that it does not matter if there is manipulation today, the organic volatility of bitcoin will impose its price, that correction will happen but I do not think this will happen in the short term, on the other hand forget about the price below $ 45k.

Bottom calling tactics will work until some macro trend comes by and completely destroys it.

You're assuming that institutions somehow know better than we do, which is actually something that has been consistently disproven. Especially in a market as volatile as the crypto markets, it is simply impossible to predict what regulations will come next and what people in the market feel at this particular moment - there are simply too many variables at play.

Instead of trying to predict the bottom, why not just DCA whenever prices are relatively low and only offload when you absolutely need to? Isn't that much more productive?

I do not agree that every company that bought bitcoin will sell eventually, these are the same wall street companies that keep holding same stocks for decades, Warren Buffet has been holding coca cola for 50 years, maybe even a bit more, he bought geico shares god knows how many years ago. Long story short this is the type of community (wall street) that doesn't sell, they just let it grow and tell their customers the money is there, why would they get scared and sell? This is why I think it is quite obvious that we should be doing fine right now, who would want to disturb that?

I think companies will keep buying and holding and that is why the bottom could be even higher than what OP said, if we crash nobody would care about those prices but I do not think that we will crash, we are doing much better than expected and as long as they keep buying, we will be doing better as well.

But you dont know the buying price or time. We see them in the limelight this year but if they have been diligent enough with their investments which they usually are, they would have bought when price was back in 10k USD or lower. Taking that into account any price that they sell at in this market is a profit.

That is longshot. With more governments that may be willing to allow crypto, the price will increase. These companies know how to milk out a price from an asset instead of selling everything at one price. So they will likely sell by at a slow and staggered pace, not all at once.

Again, I am more of the assumption that they are not selling everything at once.

Again if they sell, small cap investors will also buy making the price balance out at a level much higher than the average buying price of these companies put together. These small cap groups havent been able to buy big amounts in bitcoin, courtesy of the high price.

It is also risky buying the bottom since you can't guarantee if that is already the bottom, it is like catching falling knives by buying the bottom. But some are also using the term "buy the dip", which the dip gonna be a bottom too, if you are buying for the long term then buying every dip is good with dollar-cost averaging.

Speaking of the companies who keep buying, I don't think some of them will try to sell their Bitcoin for this year or even this bull run cycle, they are for the long term.

Those companies are free to buy and sell and they can’t stop the market from getting its bottom because that’s a normal trend of the market, we buy at low and we sell at peak now if you don’t have holdings anymore, we’re going to buy at the bottom. If you do see some good coins that is hitting their bottom today, that can be a good entry price.

Bitcoin's value may have been sustainable near its ATH in 2017. Until market fears related to bitfinex/tether caused it to plummet. Fast forward to 2021. Many expect history to repeat itself like it did in 2017 with a negative price correction. But is that scenario likely in the absence of bitfinex/tether fears to fuel a sell off? Circumstances have shifted significantly over the last 4 years. The entire world has been turned upside down thanks to the pandemic and volatile political situation.

In 2017 most would have laughed if someone said hyperinflation or deficits were real concerns. Today in 2021 people are taking it more seriously. They're trying harder to protect their wealth from devaluation/hyperinflation. Traders are also learning lessons about trading crypto and may not fall for another bitfinex/tether scandal without better evidence.

It is possible bitcoin's price will be sustained. But I can't claim to be a fortune teller and would look for an easier & more predictable call to make if I was thinking about investing.

you cant guess when a company will sell or what their mind is thinking as their exit price.
but what you can tell is via the price they paid. the value they would never sell below.

this can be useful for knowing what a true bottom is if there was a massive dip/correction

imagining mining cost bottom of ~$22k right now. miners wont sell below this. and the hobby miners with higher costs would prefer to buy then mine if the price went down to that level forming a good solid support pressure to not go below

then there is the utxo mover value.
currently there is ~10mill coins in mid-active circulation(moves regularly or within the last 2 years)
there was about ~7mill coin in the active circulation (moves regular or within last 6 months)

lets concentrate on the last 6month of coin movements. setting a value (usd) of when they last moved to be treated as the sentiment of what they last valued it the last time it moved.
01.14% of coins have moved in last 0-24hours and sentiment value of >$60k
03.10% of coins have moved between yesterday-last week and sentiment value of >$50
08.59% of coins have moved between last week-last  month and sentiment value of >$47
15.48% of coins have moved between last month-3months ago and sentiment value >$37k
07.73% of coins have moved between 3month-6month ago and a sentiment value of $10k

this is basically saying all traders in last 6 months. wont go below $10k as they are in a losing position
but this makes it only 36% of al coins over last 12 years.. being valued above $10k

if we are to ignore the 64% of coins that have not moved in the last 6 months. and just say they are not involved in exchange price decisions.. then

out of the remaining 36% if we call that the 100% exchange sentiment
3.16% will refuse to sell below $60k... so add this to the next column
11.77% will refuse to sell below $50k
35.63% will refuse to sell below $47k
78.63% will refuse to sell below $37k

so id call a mining support wall of $22k and a active exchange sentiment support for $37k

i personally think the $22k is the ultimate bottom no one will dare pass
and $37k as the good support resistance where 3 quarters of active traders wont sell below

It's just your theory, but there is no way to get the actual time an investor would sell. It gets a bit more tricky when it's a public company with numerous investors.

If we are to consider your hypothesis; companies would sell of their stash before they get into the red zone, well if this happened then thier buy in price would not be the bottom, cause such a massive sell could have psychological effect on the market and cause further price drops.

---

Imo, there's no point trying to game the strategies of public companies, their percentage share in the market is still quite low, this reduces their level of influence over price movements.

I don't think that the companies decision can actually influence the price of the bitcoin at any moment, it's right that they are the big investors, but it's not like they own majority of the coins and can determine the actual selling/buying price. And I agree with some here that the companies will not actually sell it unless at a great profit and hold it for long now if they actually believe in the vision, because to make small profits, their business was enough.

We'll never know when but just like us, they have plans on which selling price is going to be their point. But just as we know, with all of those thousands of bitcoins that they're going to dump at once, that's for sure going to shake everybody. And if they do, no need to worry, there will always be another companies who are willing to buy those bitcoins at a lower price. Well, I won't put pressure to myself thinking at what price they would sell and instead, I'll focus in accumulation than thinking those things.

Are you saying that the companies will defend the price level that they bought at by buying even more coins if the price touches it? Or that other investors will refuse to sell that level out of sheer respect for the wisdom of those investments? I think both are unlikely.

The companies like Microstrategy and Tesla might sell a portion of their coins when the price will reach high prices, they aren't average joe hodlers who will never ever sell because of a meme. If the price goes up 4 times relative to your investment, you can ensure going even by selling 1/4 of your stash - a pretty good move in a bull run. They are going to sell a portion of their coins close to the top, and hodl the rest for long term.

Nope, it will always be about the supports and resistances and you can't take into consideration the buying price of companies have bought even as some kind of "psychological barrier". Not unless they have bought on these prices that fall in a support this theory of yours is not possible, its like considering a huge volume from that price as some kind of future support in the future which I doubt applies to any kind of technical analysis we currently have.

You make a good point. Looking into Op's believe that the companies will sell and cause price to slump but I don't agree to it. All companies won't sell at the same time and that means the few hodling will buy it off, this will be the beginning of price hitting 100k with a week of such action.

And like you said, companies have a stake price for sell and therefore, they don't panic like individual who dumps at a slightest far in the market.

Your analysis might be right only if they hold large amount of bitcoin after buying it and holding it.

For the case of tesla and microstrategy, I might say yes. It's my estimate and opinion as well regarding the new bottom price but that doesn't make sense to a free market, value might drops, lower than their buying price.

The problem with the theory that you have is that for the most part those companies are buying bitcoin as a hedge against inflation, why would they sell when they know that if they do they will just make any crash larger than it would be affecting themselves in the process.

The decision to get in was not easy and the fact that they did so with such a huge amount of money made the decision even harder, but once they took it I do not think they have much of a chance but to keep the course, they may sell some once in a while to buy the stocks of their own company and things like that but to totally get out of the market is probably out of question.

Very well said.
This can indeed happen , these companies are not the ones who are going to hold on long. Even ELon Musk was using bitcoins and twitter to gain some money 💰 at the same time what else will these companies do ?
They will generate fake whale alerts ,they will try and influence the price , they will take over the market as a whole. I do like the point that Bitcoins is being brought at such a large scale but I do no like that we don't have any laws protecting Bitcoins itself from the market Manipulation. We do not know what will happen in the future we can trust no one except Mr. Satoshi to hold Bitcoins for innumerable time.
We are at a risk of market Manipulation and we do need some laws to make sure that does not end bad for us.

You people are thinking they are invested in Bitcoin without doing any kind of study and for dumping the market! Companies like MicroStrategy or Tesla have more experienced traders associated with them and they are continuously studying the world economy and the movement of Bitcoin. They are not doing panic sell like you and me cause they know how the crypto market cap is working. When most of the people are rushing to sell in dumping moment, Companies are attempting to add more Bitcoins to their holding by making a public announcement. Where we see a market crash, they are seeing Buying opportunities.

Can you give me a reason why those companies are about to sell their bitcoin investments? Which happened quite recently though and one year of span is not too huge in terms of companies perspective and I beleive they invested for very long term purposes.

Even if you are right 42K is quite far from the previous ATH which is 20K happened at 2017 but I thought it would go to such level as the lowest low before raising for next all time high.

These companies aren't like us that panic when the price goes down. And before buying, IMHO, they have a clear plan when and how much they should sell. It's all a question and nobody knows when unless an employee or an executive would tell and expose it to the public.
Some of them are accumulating whether it's already the bottom or not. It's part of the plan and we'll never know if that's actually the bottom price for bitcoin.

It is hard to make a prediction from your hypothesis. Even if we consider the number as an indicator, nothing ensures that it will not surpass the next bottom. If you want to try, so beat it. Personally, I will use Fibonacci retracement or traditional indicators because they have been used worldwide and when people use something frequently, it will be a Self-fulfilling prophecy.

Advance traders actually do not care about the all-time low because they can make money as long as the price of bitcoin continues to fluctuate

There's still a continuous printing of more money, Inflation and hyperinflation is even yet to come with full force to haunt most countries, and it definitely will, these companies bought Bitcoin mostly as a hedge to escape all this and protect some of their assets from devaluation and the negative effects of the pandemic; why then are they going to sell the same Bitcoin now, converting it back into fiat that's awaiting the very inflation/devaluation they are trying to escape from.

But do you have any rational argument to support that or is it just a hunch?

If we heed Saylor, who's who talked Musk into buying Bitcoin, the companies buying now are not going to sell in at least 10 years and some are never going to sell. In any case, they will take loans using Bitcoin as collateral. Why are you going to sell the world's best store of value if it has not yet exceeded the market cap of gold? If you told me they want to sell when Bitcoin reaches $10 trillion market cap I could still see the logic in it but the way you put it, either you argue it or I don't see the point.

Between theory and speculation are slightly different, but the clearest your statement, it does have a point, and I often see this phenomenon when the average value : the amount of remaining supply remaining at this time, giving a temporary answer, will greatly determine the extent to which your hypothesis, accurate and not. this requires some further research. TOP and BOTTOM must be balanced if the analysis requires a sign in the middle of the current bitcoin price.

maybe, to make it look clearer added a zigzag indicator. even though it's simple, it's still effective to apply.

I have a theory that:

All companies that have bought Bitcoin will sell it at some point, and this point will mostly be this year.
Can we consider the average bitcoin price that some companies bought bitcoin as an indicator for our next bottom or ATH bottom, assuming that those companies will try to sell before they achieve losses?


Based on this hypothesis, my analysis of price is as follows:

New bottom 42,334

MicroStrategy inc. selling price: 24,114
Tesla, Inc.: 31,250