Can the average buying of some companies be considered a sign of the bottom?

[GreatArkansas]

(.....)
If you do see some good coins that is hitting their bottom today, that can be a good entry price.

It is also risky buying the bottom since you can't guarantee if that is already the bottom, it is like catching falling knives by buying the bottom. But some are also using the term "buy the dip", which the dip gonna be a bottom too, if you are buying for the long term then buying every dip is good with dollar-cost averaging.

Speaking of the companies who keep buying, I don't think some of them will try to sell their Bitcoin for this year or even this bull run cycle, they are for the long term.

[TheUltraElite]

All companies that have bought Bitcoin will sell it at some point,

But you dont know the buying price or time. We see them in the limelight this year but if they have been diligent enough with their investments which they usually are, they would have bought when price was back in 10k USD or lower. Taking that into account any price that they sell at in this market is a profit.

and this point will mostly be this year.

That is longshot. With more governments that may be willing to allow crypto, the price will increase. These companies know how to milk out a price from an asset instead of selling everything at one price. So they will likely sell by at a slow and staggered pace, not all at once.

Can we consider the average bitcoin price that some companies bought bitcoin as an indicator for our next bottom or ATH bottom, assuming that those companies will try to sell before they achieve losses?

Again, I am more of the assumption that they are not selling everything at once.

Again if they sell, small cap investors will also buy making the price balance out at a level much higher than the average buying price of these companies put together. These small cap groups havent been able to buy big amounts in bitcoin, courtesy of the high price.

[el kaka22]

I do not agree that every company that bought bitcoin will sell eventually, these are the same wall street companies that keep holding same stocks for decades, Warren Buffet has been holding coca cola for 50 years, maybe even a bit more, he bought geico shares god knows how many years ago. Long story short this is the type of community (wall street) that doesn't sell, they just let it grow and tell their customers the money is there, why would they get scared and sell? This is why I think it is quite obvious that we should be doing fine right now, who would want to disturb that?

I think companies will keep buying and holding and that is why the bottom could be even higher than what OP said, if we crash nobody would care about those prices but I do not think that we will crash, we are doing much better than expected and as long as they keep buying, we will be doing better as well.

[magneto]

I have a theory that:

All companies that have bought Bitcoin will sell it at some point, and this point will mostly be this year.
Can we consider the average bitcoin price that some companies bought bitcoin as an indicator for our next bottom or ATH bottom, assuming that those companies will try to sell before they achieve losses?


Based on this hypothesis, my analysis of price is as follows:

New bottom 42,334

MicroStrategy inc. selling price: 24,114
Tesla, Inc.: 31,250

Bottom calling tactics will work until some macro trend comes by and completely destroys it.

You're assuming that institutions somehow know better than we do, which is actually something that has been consistently disproven. Especially in a market as volatile as the crypto markets, it is simply impossible to predict what regulations will come next and what people in the market feel at this particular moment - there are simply too many variables at play.

Instead of trying to predict the bottom, why not just DCA whenever prices are relatively low and only offload when you absolutely need to? Isn't that much more productive?

[famososMuertos]

If one checks the news and the bitcoin data from a year ago, one can realize that there were certain movements that presaged a terrible year for bitcoin, in fact at a certain point it was below $ 10k in the month of March (2020) , but it is well known how bitcoin held its price in 2020. But that year had several institutional investors, who from my point of view have come to stay for a longer time, they themselves between the lines have said that they are going to keep bitcoin above 50k.

The point is that it does not matter if there is manipulation today, the organic volatility of bitcoin will impose its price, that correction will happen but I do not think this will happen in the short term, on the other hand forget about the price below $ 45k.

[Lorence.xD]

I do not agree that every company that bought bitcoin will sell eventually, these are the same wall street companies that keep holding same stocks for decades, Warren Buffet has been holding coca cola for 50 years, maybe even a bit more, he bought geico shares god knows how many years ago. Long story short this is the type of community (wall street) that doesn't sell, they just let it grow and tell their customers the money is there, why would they get scared and sell? This is why I think it is quite obvious that we should be doing fine right now, who would want to disturb that?

I think companies will keep buying and holding and that is why the bottom could be even higher than what OP said, if we crash nobody would care about those prices but I do not think that we will crash, we are doing much better than expected and as long as they keep buying, we will be doing better as well.

Why wouldn't you agree, that will be their endgame, its just that it will take a long time before they are going to sell their bitcoin, the stocks that you are talking about are constantly traded around the market so you can't really say that they hold the same stock for decades, how is it supposed to make money if it were to stagnate there. They will eventually have to sell their bitcoin, its not like stock where it gives dividends and interest. Buying is not the only move for this companies because the money that they use to buy these bitcoins are the money of their investors so they need to make it grow so they can take their part in it and make their investors get rich.

[Twentyonepaylots]

Not a sign or symptom but the first wave of an impending disaster. Don't want to be the pessimist guy in here or the doomer boy but as OP have mentioned, these guys will sell at some point, probably later this year, and when that happens, us small time investors will be the one to take the beating of a lifetime, and capitalism wins yet again.

[doomloop]

All companies that have bought Bitcoin will sell it at some point, and this point will mostly be this year.

They will sell at one point obviously otherwise it doesn't make sense to buy it in the first place. They will all sell within this year? I do not agree because different investors and companies have different mindsets and strategies about divesting their investments. Also if everyone sells at the same point, no one actually benefits as the market gets shut down completely.

I suggest we must stop making theories when the price is pumping because we already made enough theories when the price was dumping, so we need to calm down and appreciate the growth we have seen this year. Just sell when you feel that the price is higher than the value of bitcoins, if you understand what I mean.

[wxa7115]

Are you saying that the companies will defend the price level that they bought at by buying even more coins if the price touches it? Or that other investors will refuse to sell that level out of sheer respect for the wisdom of those investments? I think both are unlikely.

The companies like Microstrategy and Tesla might sell a portion of their coins when the price will reach high prices, they aren't average joe hodlers who will never ever sell because of a meme. If the price goes up 4 times relative to your investment, you can ensure going even by selling 1/4 of your stash - a pretty good move in a bull run. They are going to sell a portion of their coins close to the top, and hodl the rest for long term.

You have a point however the companies that have bought bitcoin and do so in big quantities basically have done so to use bitcoin as a hedge against inflation, while selling small amounts of bitcoin can make sense in order to do some movement or acquire more capital for their operations selling a large amount of their stash will go against their stated purpose.

I think that if the price was crashing and they were given two options whether to buy more or sell their stash most likely they will make the calculation that it is on their best interest to reduce the impact of the crash and buy more in order to stabilize the market and protect their holdings that way than to sell everything they have and add more fuel to the fire.