Buying dips has now become a ritual whenever bitcoin’s price plummets, and there’s a lot of hope for the crypto king when he’s at the bottom. With prices falling in December and January, an investor might be wondering will this trend continue? Answer to the question, data from report from Santiment to shed some light on what was really going on.

It all depends on your mentality

Santiment tracks social volume and “buy dip” dominance, showing that most people made their decisions before Bitcoin hit the December 2021 and January 2022 lows.

The source: mood

According to the company, when Bitcoin bottomed in July and eventually reversed to double, the words “inflation” and “Fed” were common on the social media platform.

“Concern about both ‘inflation’ and the ‘Fed’ mounted. Similarly, those words rose around BTC’s last major bottom in July 2021. The concept of traditional market hedging in crypto seems to be gaining acceptance over the week.”

Social Dominance of the Word “Inflation” (Gold) | Source: Santiment

The societal dominance of the word “Fed” (pink) |Source: Santiment

Similarly, Santiment observed that when the word “buy dip” goes viral on social media, prices often continue to fall. Conversely, when the buy dip disappears, the price has a real uptrend.

According to the company, the “buy the dip” excitement is now fading and the declining prices are being bought less and less. This could be a bullish catalyst for Bitcoin as the crowd slowly gives up.

“When it comes to buying dips, it’s important to note how enthusiastic the trading public is. When traders think the price is about to go up, this is usually not when the price actually bounces.”

Frequency of social trends “buy dip” | The source: mood

However, it is not enough to just monitor social indicators. After all, it’s Bitcoin’s movements that can reveal a lot about investor behavior and trends. For example, since June 12, the speed of the king coin has decreased. Although there were some minor spikes after that, the speed remains below 0.035. This means that the coin’s activity has declined significantly, suggesting a thinning out in the buying dip crowd.

The source: glass node

At the same time, considering the circulation and outflow of USDT and DAI on the exchange, the Santiment report states:

“The crowd is showing signs of losing interest in the market. Those who wanted out did just that. Those who choose to hold are actually holding.”

Another factor to consider is the amount of HODLed or lost Bitcoins. Glassnode data shows that the number of coins in this category is consistently hitting 1-year highs. Assuming more coins are HODLed than lost, this again signals that owners are determined to hold rather than sell them.

???? #Bitcoin $BTC The amount of HODLed or Lost Coins just hit a 1-year high of 7,287,363,609 BTC

Show metrics:https://t.co/dJK8rxBVD3 pic.twitter.com/t5Fx3iohNW

— Glassnode Alerts (@glassnodealerts) January 16, 2022

“HODL or lost coins just hit a 1-year high of 7,287,363,609 BTC.”

Nayib Says No to Buying Bitcoin Dip

President Nayib Bukele of El Salvador is often one of the first to show up when Bitcoin slips. However, the head of state of this Central American country has announced that it will not buy dips in January 2022.

Accordingly, TRON founder Justin Sun tweeted somewhat teasingly and smugly to explain bought some BTC for $40,000.

At the time of writing, Bitcoin is priced at $41,945 and is up 0.5% in the last 7 days. However, the market is trembling in extreme fear.

Source: TradingView

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