Bitcoin analyst and co-founder of software development company Hypersheet Willy Wu believes the network’s indicators show that BTC is not in a bear market despite observed levels of “peak fear”.
Speaking about the What Bitcoin Did podcast hosted by Peter McCormack on Jan. 30, Wu cited key metrics such as large numbers of long-term holders (wallets held for five months or longer) and rising rates of accumulation suggest the market hasn’t flipped. moving into bear territory:
“Structurally on-chain, this is not a bear market setup. Although I would say that we are at the peak of fear. Undoubtedly, people are really scared, which is usually […] is an opportunity to buy.”
I think BTC is in demand lately pic.twitter.com/5h1IeMT2lK — Willy Woo (@woonomic) January 29, 2022
In the short term, Wu noted that “you don’t often get a pullback like this without a bounce of relief” and that a potential capitulation to $20,000 doesn’t seem feasible as it would repeat the 2018 bear market crash. space in just three months, not a year.
The BTC price is down about 44% from its all-time high of $69,000 in November, and the analyst cited institutional futures trading as a key reason for this sustained decline and flat performance over the past three months.
Wu suggested that the growing influx of mainstream traders and the deployment of BTC futures markets over the past few years have significantly changed the structure of the BTC market, in which price is directly correlated with “risk-to-risk-exit from macro traders looking at traditional stocks.” “.
“You know that between 2019 and 2020, if you looked online at what investors were doing, they were piling up, but you just couldn’t see any price impact because the price was really being dictated by the traders on the futures exchanges.” he said.
The analyst cited a large number of long-term hodlers that hadn’t sold for more than five months, traders that stopped selling in the $40,000 region, and a stable level of savings as the main reasons for remaining optimistic.
Related: Bitcoin Price Closes To $40K, But Professional Traders Still Skeptical
“Most of the coins have been sitting there for more than five months and people who do this hold for five months, they don’t sell at a loss, they will sell when there is a profit and you” I will see it whenever it breaks all-time highs and it really goes up.”
In terms of adoption, Bitcoin has about the same number of users as the Internet in 1997. But Bitcoin is growing faster. The next 4 years on the current path will bring the number of Bitcoin users to 1 billion people, equivalent to 2005 for the Internet.pic.twitter.com/Np9yTR3WkL — Willy Woo (@woonomic) February 1, 2021
He also argued that the key indicator of a bear market is usually that “newbies” or holders of new coins are in the majority:
“The bear of 2018 was at the peak of new coin holding guys and the cycle is repeating itself. These guys either sell, or the ones that don’t become hardcore hodlers sell on the next rally when the price gets even higher.”