“HODLers supporting a bottom – historically, long-term Bitcoin holders have purchased Bitcoin during weak markets.
The number of addresses holding Bitcoin for more than a year (known as “hodlers”) increased from 10 million BTC to 15 million BTC in 2022, a rise of 50%. The hodlers’ balance starts to decline only after fresh highs are made, which is a pattern that has been seen in prior bear markets.
According to the article, half of Bitcoin owners are currently underwater, just as it was the last several times Bitcoin reached the bottom of a bear market.
Previous bear markets have bottomed out when 50% or more of the holders are losing money on their investments, which IntoTheBlock classifies as being “out of the money.”
According to IntoTheBlock, after their courses diverged due to the failure of well-known cryptocurrency exchange FTX, stocks and cryptocurrencies, particularly BTC, have started to correlate again.
Although the firm acknowledges that the current state of affairs is similar to previous bear market scenarios, it is difficult to predict what lies ahead for Bitcoin.
“Macro correlations have returned; following a period of divergence during the FTX collapse, stocks and cryptocurrencies have started moving in lockstep once more. Currently, the Nasdaq and Bitcoin correlation coefficient is back up to 0.86, indicating a very high statistical association between the two…
Although historical bottoming patterns are followed by on-chain measures from prior bear markets, the increasing importance of these macro elements makes it unclear if the recent price movement heralds the start of a bull market or is merely a bull trap.
At the time of writing, the price of one bitcoin is $22,624, up almost 7% over the last 24 hours.