Bitcoin drops below $60K again! Should you buy the dip today?

• Bitcoin traders have capitalized on significant gains from the recent rally when BTC tested the $64K resistance level.
• With the price now down, should you buy the dip?

Bitcoin [BTC] hit strong resistance at $64K, giving bears the upper hand. As of this writing, Bitcoin has dropped 5.55% in the last 24 hours, trading at $59,532.

Surprisingly, this setback came shortly after economic optimism surged due to expectations of rate cuts. As a result, AMBCrypto investigated whether traders are strategically positioning themselves to take advantage of the next dip. 

BTC traders locked in profits after recent rally

Following the bearish clash in early August, bulls are eagerly seeking a rebound, aiming to push Bitcoin past the previous $70K resistance. However, breaking through $60K now seems like a distant goal.

Driven by this, AMBCrypto examined historical data and identified a recurring pattern that sheds light on traders’ strategic positioning.

Source : Glassnode

Interestingly, on the 29th of July, after a bullish rally pushed BTC near the $70K mark, USDT net outflows surged to $330 million, signaling that traders were cashing in on the earlier gains.

This net outflow highlighted a trend of USDT being withdrawn from exchanges, serving as a safe haven or profit keeper. 

Similarly, the end-August cycle saw traders locking in their two-week profits as BTC bulls managed to break through the $62K support level, leading to a subsequent price dip.

Combining this analysis with data from future traders in the perpetual market would provide a clearer insight.

Source : Coinglass

According to AMBCrypto’s analysis of the OI chart, every time BTC nears a resistance barrier and experiences a bull rally, the number of closed positions increases afterward. This highlights a pattern of profit-taking as resistance levels are tested.

Over the past 7 days, a prominent crypto analyst forecasted $64K as the next resistance level for BTC. The price dipped when it reached this level, highlighting how prepared traders were to lock in their gains.

Now that the price has dropped significantly following traders locking in major gains, should you buy the dip? AMBCrypto investigates.

High USDT inflows signal…

As shown on the chart below, the day BTC last closed above the $64K ceiling, on the 24th of August, a stunning $69 million in Tether flowed out of exchanges, indicating that traders were locking in their profits. Consequently, the price dropped below $60K.

Source : CryptoQuant

However, since then, USDT inflows have regained control. A day after the massive USDT outflow, the exchanges recorded $182 million in inflows, showing renewed interest and potential buying pressure.

In a post on X (formerly Twitter), Santiment noted that Tether network recently saw a 5-month high with over 31.3K new wallets created in a single day, and multi-collateral Dai is also growing.

This rise in new wallets, combined with stable BTC and Ethereum wallet numbers, suggests new money is entering the crypto market, indicating that more traders are buying the dip.

Source : X

Read Bitcoin’s [BTC] Price Prediction 2024-25

However, caution is advised, as noted by another prominent analyst. His analysis reveals that open interest has yet to recover, with bulls having lost $100 million due to long position liquidations.

Therefore, a strong whale activity could be the key to healing the wound.