Bitcoin Crashes Constantly, But These Investors Won’t Sell – Why ‘HODLers’ Buy the Dip and Hang On Tight
While Bitcoin has seen a roller coaster ride in the past few weeks, some experts say its volatility is stabilizingIt should be noted that retail investors are re-entering the market and long-term investors are on the “HODL wave”. (More on the meaning in a moment.)
It’s interesting to note that, according to Coinshares’ James Butterfill, bitcoin outflows cooled to a total of $ 10 million last week, “significantly less than the previous week’s record of $ 141 million,” according to a blog post. He adds that trading activity in Bitcoin investment products is up 43% compared to the previous week. Butterfill tells GOBankingRates that it attributes the decline in outflows “to an early indication that we have peaked in the bear market and that investor sentiment is turning positive again.”
Blockchain data provider Glassnode says in a report that the high volatility of the Bitcoin markets makes them a magnet for traders who can monetize price fluctuations in both directions. The “new HODLers” are investors who buy the dip in the current range and likely hold it during “whatever volatility that lies ahead,” the report said.
“At the same time, Bitcoin’s strong fundamental properties make it a sought-after store of value for long-term investors. During a troubled and consolidating market structure, we can gain insight into the balance of supply and demand, as well as the degree of accumulation among short and long term owners, by observing changes in profitable supply during price fluctuations, ”the report said.
Also in the report? Insights into long-term traders, mostly people who bought crypto in the early bull market and are “HODLers who bought coins and didn’t spend them in early January 2021,” suggesting they don’t panic during this volatility and are therefore more likely to sell again accumulate as a payout.
Traders and short-term owners are investors who trade with price fluctuations “and liquidate more on target price or downward volatility. They are also more likely to use derivatives markets and leverage, ”the report said.
Butterfill added on GOBankingRates, “Given the recent price plunge that has rocked some investors, it may be a little while before we start testing the all-time highs again.”
Bitcoin fell 1% this morning to around $ 39,000, according to CoinMarketCap. According to MarketWatch data, the cryptocurrency is up 315% over the past year and 34% since the start of the year.
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This story has been updated to include an exclusive comment from James Butterfill.
This article originally appeared on GOBankingRates.com: Bitcoin keeps crashing, but these investors won’t sell – why ‘HODLers’ buy and hold the dip