Crypto analytics firm says Bitcoin (BTC) Hodler’s decision remains rock solid – but there’s a catch
Blockchain analytics platform Glassnode says the faith of long-term Bitcoin (BTC) investors remains unshaken.
Glassnode says it pays close attention to the Dormancy metric, which tracks the average age per unit of BTC moved.
According to the research firm, low dormancy values mean that the coins used are relatively young, which suggests that older coins are generally unused.
Glassnode says the average age per BTC is currently at multi-year lows, indicating that the crypto downturn has done little to dent the conviction of long-term Bitcoin investors.
“…it is abundantly clear that it has found no widespread loss of the HODLer judgment.
The decline in lifetime values actually bodes well for the longer term, as it indicates that old coins are stationary, and falling prices have little psychological impact on this cohort’s beliefs.”
However, Glassnode says that the persistent weakness of Bitcoin despite the strong conviction of long-term holders is bad news for the royal crypto.
“If prices were on the rise, this would be a very constructive signal, as it shows that older coins are staying dormant. However, as it stands now, this indicates the opposite, with prices still struggling to hold the line even with older coins which remain in investors’ wallets.”
Glassnode adds that a similar calculation on the chain also shows the precarious situation of BTC.
“On a macro scale, the Coin-Years Destroyed calculation continues to push down, reaching a relatively significant low.
This metric aggregates the total lifetime broken (in years) over the past 365 days, and like hibernation, lows are usually constructive and typical of late-stage bear markets.
It is still likely that the Bitcoin market is trading within what could become a long-term bottom formation pattern.
However, it is clear that the market is just hanging on at the moment and is far from out of the woods yet.”
Bitcoin is trading at $20,202 at the time of writing.
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Featured image: Shutterstock/Sergey Nivens
