The Bitcoin price surge has led to a market FOMO among small BTC addresses

Fear of missing out (FOMO) was prevalent in the market during the second week of January as a result of the rise in price of Bitcoin (BTC) over $20,000, particularly among holders of a modest amount of BTC.

After January 13, there was a large increase in the number of Bitcoin addresses that held 0.1 Bitcoin or less.

Since the price of bitcoin spiked on January 13, a total of 39.8 million new Bitcoin addresses have been created, according to data that was recently provided by the cryptocurrency analytics company Santiment.

In 2023, a regrowing investor confidence may be inferred from the growth in the number of Bitcoin addresses holding just tiny sums. The construction of new addresses has been increasing at a faster pace as of 2023, despite the fact that the growth of such tiny addresses was very constrained and halted dramatically when the FTX collapsed in November 2022.

The latest surge of Bitcoin addresses for amounts less than one bitcoin is the greatest it has been since November 2022, when BTC reached its cycle low of about $16,000. As a result of the price drop, smaller dealers were able to purchase Bitcoin at a more favourable price. The present increase may be due to a rising optimistic feeling in the market, where, in addition to Bitcoin, other altcoins have also hit multimonth highs, while the total crypto market rose over 30%. This is the market where the majority of the altcoins have outperformed Bitcoin.

In the first week of February, the positive momentum that Bitcoin had been riding into the month continued, as the cryptocurrency reached a new high of over $24,000. However, the $24,000 barrier proved to be too much for the market to maintain, and at the time this article was written, the price was trading about $23,000. According to the opinions of market analysts, February may not be as positive as January was.

In light of the uncertainty surrounding the potential impact of forthcoming macroeconomic data from the United States on market mood, market professionals have issued a warning that the recent upward trend in crypto and stocks may reverse course this month. They ascribed the size of the likely future downward trend to the Federal Reserve’s rises in interest rates, which have been taking place recently.


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Trader builds Bitcoin ‘buy the dip’ bot, outperforms DCA

While a bullish backdrop emerges in February, spare a thought for the traders trying to time the market. One savvy trader by the name of Samjhill on Reddit has built a trading tool that outperforms dollar-cost-averaging (DCA) for buying Bitcoin (BTC). 

DCA is the strategy in which investors buy a small amount regularly regardless of price fluctuations. It works in contrast to traders keen to get the lowest entry, timing the dip to perfection and avoiding “catching a falling knife.”

The aptly named “Buy the Dip Bot” aims to “get the best price for a given asset by using a limit strategy.” Inspired by another Redditor who suggested a manual limit-buy-order strategy for getting the best price entry, Sam took the idea one step further, coding up a dip buying bot.

The bot places limit orders at several intervals below the current price and if an order gets executed or canceled, it starts again. Using tech from AWS, Python, Lambda, DynamoDB and React.JS while hosted on Github, the cost to run is low, “about $5 per month.”

While the bot has been beavering away since December, it hit a maiden milestone yesterday. Reaching profitability versus regular dollar-cost averaging, “the price-per-coin advantage is about (cheaper) 5-10% right now, which you could also think of as getting that much more coin for your money,” Sam told Cointelegraph.

The bot runs a backtesting library to work out the best entry points for the limit buys. A complex process, the work paid off, culminated in a “winning strategy.”

Related: TokenBot helps crypto traders build social communities and monetize market knowledge

When asked by Cointelegraph if he would recommend the bot as opposed to regular DCA, Sam replied it depends on where you are in your BTC journey:

“For people just starting out, regular DCA probably makes more sense, since your goal is probably to stack as many coins as possible. For those later in their journey, they might have a decent stack already and want to minimize increasing their cost basis, and so might benefit more from this.”

Sam, who first learned of Bitcoin around 2013, added that he is doing both DCA and the limit strategy “to get a more even curve of coin growth.”

While the future is currently Bitcoin orange for the trading bot, Sam built the system for easy integration with other coins. Ethereum (ETH) features on the Github page, and Sam hints he may roll out other coins to production.