Market Analysis

Bitcoin’s (BTC) painful plunge below $30,000 on Tuesday turned into a so-called “buy the dip” opportunity for Alameda Research, a Hong Kong-based quantitative trading firm and liquidity solutions firm headed by FTX-famed Sam Bankman-Fried.

The company’s quantitative trader Sam Trabucco revealed late Tuesday that they purchased Bitcoin during its latest price decline, adding that their cautious strategy to go long BTC/USD surfaced out of at least three “recovery” catalysts: a potential end to the ongoing crypto FUD (China ban, Grayscale epic unlock, etc.), stock market’s intraday recovery, and weaker long liquidations in the derivatives market.

“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.”

Panic-sell ahead? Opinions differ

The statements appeared as Bitcoin attempted a modest recovery above $30,000 on Wednesday. The cryptocurrency established an intraday high at $31,669 on the FTX exchange, which just raised a record $900M. Later, the price corrected lower albeit minimally, thus showcasing limited selling pressure near the said sessional peak.

Meanwhile, Naeem Aslam, the chief market analyst with Ava Trade Ltd, highlighted Bitcoin’s resilience to recent bearish outlooks, with some earlier noting that a close below $30,000 would have the cryptocurrency move lower violently.

“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.”

But Jeffrey Wang, head of America’s at crypto finance startup Amber Group, provided a cautious outlook. Speaking to Cointelegraph, the former Morgan Stanley executive reminded that Bitcoin continues to trade under the global risk-on influence, which may subject the cryptocurrency to further losses. He said:

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.”

Edward Moya, senior market analyst for the Americas at OANDA, also weighed negatively on the latest Bitcoin-Wall Street correlation. He noted that if the US stock indexes enter into the “panic selling mode,” it would lead the flagship cryptocurrency lower in tandem.

“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.

Related: $13K Bitcoin price predictions emerge with BTC falling below historic trendline

As for Alameda, Trabucco admitted that they had realized downside risks in the Bitcoin market, but their latest accumulation spree focuses more on the cryptocurrency’s long-term outlook. Excerpts:

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.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, you should conduct your own research when making a decision.