Investors with long-term conviction in Bitcoin should welcome the recent pullback in the Bitcoin price with open arms as it presents an opportunity to buy or add to existing positions at lower prices, according to a research report published by Delphi Digital, a US-based independent research boutique providing institutional-grade analysis on the digital asset market.
In its new report “Why The Bitcoin Price May Be Headed For A Great Few Months”, the research firm has shared some trends that could help predict where the Bitcoin price is headed this month. While Bitcoin dipped more than 15% in roughly an hour during the last week of September, the biggest cryptocurrency has since recovered from those lows.
The digital asset research firm pointed out that those who are bullish over the long term should be happy to see these lower price points. “[Those] with long-term conviction in this asset class should welcome this pullback with open arms as it presents an opportunity to buy or add to existing positions at lower prices,” says the report.
In terms of the reasoning behind Bitcoin’s multiple, sudden price drops during the last week of September, many of those who shared their opinions on crypto Twitter were blaming Bakkt’s lackluster launch.
The much-awaited Bitcoin futures trading platform, Bakkt, was eventually launched on September 23. The platform is the first of its kind to receive approval from United States regulators and is a product of the Intercontinental Exchange (ICE), the operator of the New York Stock Exchange. Quite surprisingly, trading of Bakkt’s physically-backed Bitcoin futures saw something of a slow start on the first day of launch.
However, Delphi Digital does not agree with that assessment. “Many people seem to be disappointed in [Bakkt’s] launch but we believe a slow and steady increase in volume is much more likely as institutions and sophisticated investors become comfortable with the new product,” says the report. The report goes on to illustrate how well Bitcoin has performed following a loss of 10% or more in a single day, which is what occurred in the last week of September. According to Delphi Digital, the Bitcoin price has risen 11% on average in the 30 days following a loss of 10% or more in 24 hours.
The report further says that average returns 7 days, 14 days, and 30 days after a 10% price dip are all better than the average returns on all other days. Obviously, it’s better to buy Bitcoin after the dip than before it.
On top of this bullish trend from the Delphi Digital report, a report from crypto prime dealer SFOX earlier in the year indicated a correlation between the holidays and upward swings in the Bitcoin price. According to SFOX, this correlation is strongest when the Bitcoin price is already rising before the holidays begin, as that creates a situation where FOMO (fear of missing out) can set in while everyone is with their friends and family for Thanksgiving, Christmas, and New Year’s Eve.