Bitfarms Buys 1,000 Bitcoin at an Average Price of $43,200
Bitfarms, a crypto mining firm, has just announced that it bought 1,000 Bitcoin. The company’s CEO commented: “With the dip in BTC while mining hardware prices remain high, we seized the opportunity to move cash into BTC“.
Big Players Are Buying the Dip
Bitfarms purchased its 1,000 BTC for $43.2 million, or $43,200 per BTC. This means that Bitfarms began to buy the dip after Bitcoin managed to get below the support level at $45,500 and gained downside momentum. As a result of the recent purchases, Bitfarms is holding over 4,300 BTC as of January 10, 2022.
A bigger buyer, MicroStrategy, has recently revealed that it purchased 1,914 BTC for $94.2 milion, at an average price of $49,229 per BTC. MicroStategy is losing money on this recent purchase, but such holders are not trading BTC on a weekly basis, so traders should not expect that MicroStrategy will be cutting its losses on the recent trade.
Interestingly, strong buyers who plan to hold BTC for years have failed to provide enough support to Bitcoin in recent weeks. This is a bearish sign in the near term, as it shows that there are many sellers in the market.
The current pressure on cryptos is very significant, and it comes from rising Treasury yields. In the rising rate environment, traders rush out of riskier assets, which is bearish for Bitcoin and other cryptocurrencies. It remains to be seen whether Bitcoin will get enough support to stay above the $40,000 level in case Treasury yields continue to move higher.
Bitcoin Looks Ready To Test the $40,000 Level
Bitcoin is currently trying to settle below the support at $41,000. In case this attempt is successful, Bitcoin will move towards the psychologically important support level at $40,000.
If Bitcoin declines below the support at $40,000, it will head towards the next support level near $39,000. A move below this level may trigger a sell-off as it will confirm that Bitcoin has managed to settle below the $40,000 level.
On the upside, a move above the $41,000 level will push Bitcoin back towards the resistance at $42,600. If Bitcoin settles above this level, it will move towards the next resistance at $44,000. A successful test of this level will push Bitcoin towards the resistance at $45,500.