Why Bitcoin’s HODL Theory May Be Long Gone; BTC Investors Should Beware…

Bitcoin [BTC]The HODL narrative has lost momentum in recent months. The market has shifted in favor of short-term profits and this has taken a toll on Bitcoin’s performance. In particular, the ability to achieve medium to long-term goals.

Bitcoin’s price action failed to meet its mid-term targets and has been relegated to the lower range for the past six months. This is despite the sharp discount during that time, and heavy accumulation during the dips. The upside has been relatively limited, followed by several downsides.

Source: Sentiment

Consequently, long-term owners have not been able to remain in profit. This outcome is demonstrated by Bitcoin’s 180-day market value realized (MVRV) ratio, which has remained in negative territory for the past six months.

Bitcoin’s six-month total supply in profit is currently in the lower range. The fall in this period confirms that HODLers who bought BTC earlier are still out of the money. It also supports short-term profit telling, where investors who recently bought near June lows saw some profit.

Source: Glassnode

The common narrative when it comes to Bitcoin’s profitability is that short-term gains have been more preferable. This outcome subsequently means that any strong buying pressure in recent months was relegated to limited upside.

An unusual advantage

Bitcoin’s current pursuit of short-term profitability means that it has become easier to predict selling pressure and price floors. For example, the retest of 2017 highs has shown strong demand near the $20,000 price range. Bitcoin has made strong comebacks after each fall, and this may have contributed to the strategy shift in favor of short-term opportunities. This result also reflects Wyckoff accumulation and distribution.

Macroeconomic factors have a heavy hand in today’s preference for short-term profit. The crypto and commodity markets have been exposed to pressure from hawkish attitudes from regulators. The prospects for a strong bullish recovery in the short term are consequently diluted.

Then it’s only short-term

Many investors are still loading up in anticipation of long-term recovery despite short-term profit-taking. Long-term hodlers are still dollar-cost-averaging into the market. Especially now that the bear market is nearing its tail end. Bitcoin may also be near the current cycle bottom price because holding lower prices will limit the downside.