- Bitcoin has undergone a strong drop over recent days as legacy markets have been dragged lower.
- The cryptocurrency fell from its $11,200 local highs to lows at $10,200, marking a drop of nearly 10%.
- The coin now trades at $10,400 as of this article’s writing, only marginally above the aforementioned lows.
- Bitcoin is under the pivotal $10,500-10,600 support level despite the recovery, leaving some bearish.
- Not everyone thinks that this is it for Bitcoin’s bull trend, though.
- On-chain data shows that this may be a crypto market dip to be bought.
Bitcoin Dips Should Be Bought Moving Forward
According to the CTO of Bitcoin analytics company Glassnode, Rafael Schultze-Kraft, the ongoing correction is likely a dip to buy. He shared the chart below, which shows the spent output profit ratio (SOPR) flirting with the pivotal level of one.
In bull markets, whenever the metric falls below one, it is often seen by investors as a medium-term buying opportunity.
“Agree with Philip here – in a bull market, this is just a dip (to buy). Here’s an updated hourly chart (showing adjusted-SOPR). Bounced back after the dip below one. Will continue watching some more to confirm.”
Chart of BTC's price action over the past few weeks with an on-chain analysis of the Adjusted SOPR indicator from Glassnode's Rafael Schultze-Kraft.
Not a Standard Correction
Corroborating the expectations of a return to the upside, Willy Woo noted that the recent drop was not a standard correction by on-chain standards. That’s to say, there were irregularities in the move lower that may soon be ironed out by Bitcoin returning higher.
“This pullback from what I gather looking on-chain took most spot investors off guard, there wasn’t the usual on-chain activity preceding it. Sell off happened at exchanges only. Stocks correlation pulled BTC down its bullish week of breaking free from Stocks.”
Woo noted last week that Bitcoin is poised to enter an uptrend because there was recently a spike in BTC changed hands.
The spike was seemingly MicroStrategy’s latest purchasing of Bitcoin. Spikes in BTC changing hands on chain, Woo noted, often precedes a reversal in price action.
Featured Image from Shutterstock Price tags: xbtusd, btcusd, btcusdt Charts from TradingView.com On-Chain Data Shows This Is a Bitcoin Price Dip to Buy: Exec