Bitcoin has had a roller coaster ride over the past two weeks, showcasing its brand of volatility. After reaching an all-time high (ATH), the leading cryptocurrency saw its price fall by 15%, testing the $92,000 mark as a crucial support level. However, Bitcoin quickly rebounded, rising below the psychological threshold of $100,000. This rapid recovery highlights the market’s resilience but also reflects the ongoing uncertainty among traders and investors.
Amidst this volatility, new data sheds light on the changing dynamics of the market. Axel Adler, a leading cryptocurrency analyst, shared an insightful analysis revealing that HODLing sentiment is increasingly dominating the BTC market. Longer-term holders appear to be moving their coins less frequently, indicating growing confidence in Bitcoin’s long-term value.
This behavior underscores a broader trend: Instead of responding to short-term price fluctuations, many Bitcoin investors choose to keep their holdings intact for long periods. Such sentiments often lay the foundation for price stability and pave the way for future highs. With Bitcoin trading near historical levels and remaining at all-time highs, market participants are eagerly anticipating its next step in this dynamic and ever-evolving cycle.
Bitcoin cycle: same but different
Bitcoin’s current cycle shows familiar patterns from previous rallies, especially the halving year that historically sets the stage for a new high. As was the case in previous cycles, the halving of miner rewards tends to reduce the rate of new supply entering the market, creating upward pressure on the price.
However, this course shows key differences. BTC has become a globally accepted asset, gaining more mainstream attention and attracting new investors from diverse backgrounds. Importantly, many of these new investors are adopting a long-term holding strategy, a trend that is becoming more evident across all investor groups.
Main data from Axel Adlera popular CryptoQuant analyst, sheds light on these shifts. Since the beginning of the current bull cycle, Adler has highlighted a notable trend: the average lifespan of VTC coins has been steadily increasing on an annual scale (365 days), indicated by a blue arrow in the analysis.
This indicates that more and more coins are being held for long periods, indicating a strong holding sentiment in the market. In addition, the short-term trend (30 days) also shows a higher tendency to hold coins, indicating that short-term coin holders are less inclined to sell.
This shift towards HODLing is a bullish factor for BTC, as it reduces the circulation of “fresh” coins – coins that are more likely to be sold off during price rallies. With fewer coins in active circulation, selling pressure diminishes, further enhancing Bitcoin’s bullish potential in the coming months.
BTC price test liquidity
Bitcoin is currently in a range between crucial demand levels, with support around $92,000 and resistance near the $100,000 mark. The market is waiting for a decisive move, as BTC price action remains stuck between these two key levels.
Quite simply, if BTC trades above $100,000, the outlook is bullish, indicating the potential for further gains. On the other hand, if it drops below $92,000, the market will tend lower, indicating a deeper pullback. Within this range, there is room for hesitation, with price fluctuations between these levels likely to continue in the short term.
If BTC can hold above $95,000 in the coming days, it will be an encouraging sign for the bulls, indicating that BTC may be preparing to challenge the $100,000 level. A sustained rise above $100,000 would indicate strong bullish momentum, which could push Bitcoin to all-time highs.
Conversely, any sustained move below $92,000 would signal weakness and open the door for further decline. The next few days are crucial in determining Bitcoin’s short-term direction, and the $95,000-$100,000 range will be closely watched for any breakout signals.
Featured image by Dall-E, chart from TradingView