Bitcoin (BTC), investors are known for their ability “hodl” price drops, but new data suggests that they might be willing to keep going.
Glassnode, an on-chain analytics firm, tweeted Jan. 16 that current holder behavior mirrors Bitcoin’s behavior during the lowest extreme price cycles.
Reserve Risk: Bitcoin price ‘depressed,’ hodlers hodl on
Glassnode made reference to R-Risk’s metric of Reserve Risk. He argued that the current buying and selling trends do not reflect a macro top.
It explained that low R-Risk values are typical of mid-bear and mid-bull cycles where prices are depressed but HODLing is dominant onchain.
R-Risk measures the market’s willingness to hold onto their shares for a certain period of time versus current price action.
R-Risk is currently trending down and flirting with its “depressed zone”.
Annotated chart of Bitcoin reserve risk Source: Glassnode/ Twitter
Glassnode also stated that these moves take longer than expected to complete, which is consistent with the idea that a blow-off like this halving cycle’s top could be far off.
The Reserve Risk oscillator oscillates in line with macro bull/bear markets cycles. It has clearly defined peak lines, which correspond to blow-off tops. There are also long periods of relative undervaluation in bear market bottoms as well as into early bull markets.” it summarizes.
Miners lead the “massive accumulation” trend
These data support the general impression that long-term BTC hodlers are doubling down on their convictions in the face an unexpected downtrend.
Related: Bitcoin drops 8% from its highs, as a trader demands BTC bulls claim $37.5K
According to the source, this correction period has actually lasted through 2021. Cointelegraph reported that there is no sign for old hands giving up.
CryptoQuant, a fellow analytics firm, has shown that miners who had been “massively” building up their reserves in recent months also began to keep them more consistent in January. Bitcoin could be sitting at their production costs, which could reduce profitability.
Bitcoin miner reserve chart. Source: CryptoQuant
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