The amount of bitcoin (BTC) HODLER has marked the beginning of the previous peak and bull cycle. As the major cryptocurrency leads to $ 30,000, HODLer activity can be a useful tool to potentially gauge the next peak of BTC.
Since October, as Cointelegraph pointed out, bitcoin’s HODLING activity has steadily increased. Fewer HODLers are moving their holdings, reflecting an overall upward market signal.
Why HODLer activity is important to assess bitcoin market perception
The term “HODLer” refers to long-time holders of bitcoin. It has been possible to track the activity of HODLers by evaluating addresses that have not been transferred to the BTC for many years.
If the price of bitcoin is rising, as HODLers move their assets, it may indicate an intention to sell to take a profit on the rally.
Conversely, if HODLers move their assets when the bitcoin price declines, it could mean they are doubling their investments.
Therefore, depending on the price trend of bitcoin, a spike in HODLer activity may indicate that a major price movement is imminent.
For now, the HODLER volume states that a long-term bitcoin pullback is unlikely. Its volume is lower compared to previous peaks, indicating that long-term holders have higher confidence.
However, the volume of HODLer may lag behind and begin as the price of bitcoin slipping in the near term. If so, the possibility of extended reform may still emerge.
As such, it would be important to observe HODLR volumes in the near term, especially if bitcoin struggles to rise above $ 30,000.
Technological momentum has been raising the price of bitcoin in recent months. But if it slows down, HODLers may be headed for a sell-off, with large numbers of investors expected to improve by staying on unorganized profits.
Becoming a btc scissor is a variable
Until the HODLR volume reaches a previous high, it will be premature to predict a large-scale stretch in the short term.
Various macro factors, such as the falling dollar and the falling liquidity of bitcoin, have made BTC more attractive as a store of value, especially for institutions.
Cointegraph previously reported that bitcoin is becoming less liquid due to increased liquor activity.
This means that there are fewer BTCs that can be bought or sold, which makes BTC more rare as it is in 2021.
Rafael Schultz-Kraft, CTO of Glasnode, emphasized that this is a boom for bitcoin in the long term. that said:
“One of the most important #Bitcoin charts in 2020. Lack of liquidity, investors are becoming hoarding, accessible BTC scarcer. 1M BTC has become unlit this year, ie held by spending institutions