After weeks of non-volatility, Bitcoin (BTC) finally saw some action over the past week. In fact, the cryptocurrency traded at both $7,300 and $10,600 in the past five days. Crazy, right?
Despite this immense volatility, which liquidated hundreds of millions of dollars worth of BitMEX positions in the process, long-term cryptocurrency believers are seemingly unfazed. Entirely unfazed.
According to a recent tweet from Rafael Schultze-Kraft of cryptocurrency analytics platform Glassnode, “HODLers keep on HODLing.” He remarked that on average, “only 1.7% of spent outputs (essentially coins sent) this month were older than six months.” To put it in other words, 98.3% of all “on-chain activity [this month] was due to UTXOs created within the last half-year.”
To condense the importance of this statistic into a single line, Schultze-Kraft added: “Despite the crazy price action this week, hodlers keep on hodling.”
Despite the crazy price action this week, hodlers keep on hodling.
On average, only 1.7% of spent outputs this month were older than 6 months.
That is, 98.3% of all on–chain activity was due to UTXOs created within the last half year.
Data: https://t.co/jlwo4vqmvL pic.twitter.com/b2SN8UHfMR
— Rafael Schultze-Kraft (@n3ocortex) October 27, 2019
Technicals Suggest Bitcoin Bull Trend Forming… Again
So, why are HODLers still clutching their coins?
Well, it has much to do with their future price expectations for Bitcoin.
Right now, analysts are expecting for Bitcoin to continue to rocket higher over the next few days and weeks. An analyst noted that the weekly Fisher Transform indicator, which highlights when prices have moved to an extreme to try and signal buying and selling opportunities, has recently printed a bullish crossover at the -2.5 level. They remarked that “this signal is rarely false,” and thus strongly implies a resumption of Bitcoin price’s uptrend in the coming weeks.
On a longer-term time frame too, the cryptocurrency market seems to be shaping up well for more expansion. Just look to the stock to flow ratio (SF ratio) popularized by PlanB, Saifedean Ammous, and others in the space that suggest that Bitcoin has room to run in the years to come.
According to Bayerische Landesbank’s senior analyst, Manuel Andersch, Bitcoin’s price might be able to be fairly predicted by an SF ratio price model. Per the German bank’s logarithmic analysis of the correlation between the SF ratio of a commodity and its market capitalization, the next halving will give Bitcoin a fair valuation of $90,000 per coin.
Per previous reports from Ethereum World News, John McAfee believes that Bitcoin’s scarcity, which is embodied by the SF ratio, will be the catalyst for the cryptocurrency’s growth in the years to come.
HODLers widely buy into this theory and are thus holding in preparation for the negative supply shock.
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