Alameda Research, run by Sam Bankman-Fried, has raised its Bitcoin buying near the pivotal psychological support level of $30,000.
On Tuesday, Alameda Research, a Hong Kong-based quantitative trading and liquidity solutions business managed by FTX CEO and founder Sam Bankman-Fried, took advantage of Bitcoin’s (BTC) agonising drop below $30,000, converting it into a so-called “buy the dip” opportunity.
According to quantitative trader Sam Trabucco, who announced the buy late Tuesday, the company’s cautious approach to go long BTC/USD arose from at least three “recovery catalysts.”
The decision to go long BTC/USD was prompted by a possible conclusion to the continuing crypto FUD (China ban, Grayscale epic unlock, etc. ), the stock market’s momentary rebound, and lower long liquidations in the Derby.
“In my view, all these points [to] a similar (if vague) direction,” Trabucco wrote.
“News impact tends to revert? I’d expect crypto to rally more. Stock market did revert? I’d expect crypto to have reverted more, too. Liquidation moves usually revert? Same story.”
And all these led to Alameda doing what we do best — buying a LOT more over the past day or so. This isn’t quite “sell us all you want below $30k and fuck off” territory, but we’re continuing to buy down here, because it really just seems like too much points that way. pic.twitter.com/8l01jJAnhZ— Sam Trabucco (@AlamedaTrabucco) July 21, 2021
Is there a panic-sell ahead? Opinions differ on this matter
On Wednesday, the statements came as Bitcoin tried a slight rebound above the $30,000 threshold. The cryptocurrency reached an intraday high of $31,669 on the FTX market, which had just raised a record-breaking $900 million in capital.
Later, the price corrected downward, albeit only marginally, demonstrating that there was only modest selling pressure at the sessional high.
AvaTrade Ltd’s Naeem Aslam, chief market analyst, recently highlighted Bitcoin’s resiliency in the face of recent gloomy forecasts, with some predicting that a close below $30,000 would see the cryptocurrency drop precipitously.
“In reality, that is not what we have seen,” the executive told Bloomberg. “The Bitcoin price has been stable, and we have not seen any panic selling.”
Jeffrey Wang, the CEO of the Americas at cryptocurrency financing startup Amber Group, on the other hand, expressed caution. According to the former Morgan Stanley executive, who spoke to Cointelegraph, Bitcoin continues to trade under the global risk-on effect, which could cause the cryptocurrency to suffer greater losses. He went on to say:
“With relatively calm price action, recently, short-term speculation and trading have waned somewhat. When we do see more volatile movements, expect more traders to show interest. But that could push the price down further if the risk backdrop remains weak.”
A negative reaction was also expressed by Edward Moya, senior market analyst for the Americas at Oanda, about the recent Bitcoin–Wall Street link. He pointed out that if the stock indexes in the United States reach a state of “panic selling,” the flagship cryptocurrency will fall in unison with them, according to him.
“It is critical that the digital coin regains ground above the $30,000 level, as a significant breach could result in a massive technical selloff,” Moya wrote in a Tuesday note.
With regard to Alameda, Trabucco acknowledged that the company had recognised downside risks in the Bitcoin market, but that the company’s most recent accumulation spree has been primarily concerned with long-term prospects for the cryptocurrency. He stated,
“We do put on fairly big delta positions longish-term for a quant team, and I’ve been glad that it’s been this direction so frequently — bull markets are way more fun.”