Bitcoin hodlers targeting $100K is what’s preventing 40% price drawdown, data suggests

Bitcoin (BTC) dropping to $25,000 or lower is unlikely thanks to hodlers hoping for all-time highs, not speculative traders, new research says.

In a series of tweets on April 19, popular analyst Root argued that there is “no real reason” for a dramatic Bitcoin sell-off.

No major selling from “maturing” hodlers

Bitcoin has yet to wow the market with its all-time highs this halving cycle, and this has contributed to a loss of faith among some investors.

At the same time, on-chain indicators remain much more bullish than spot price action, and those investors still in the market support the idea that BTC/USD will go far higher in the future.

This is thanks to a lack of short-term holders (STHs) on the market, Root notes. Even the most recent all-time highs of $69,000 last November came with relatively few speculatory bets – something which contrasts strongly with the all-time high during the last halving cycle in December 2017.

What is more, it is long-term holders (LTHs) hoping for fresh price discovery who are now supporting the market, not new STHs looking to “buy the dip.”

“With the HODL Army growing it’s allowing us to make new ATH’s (69k top) without barely any STH’s in the market,” Root explained.

“Since we didn’t reach prices above 100K, which so many expected, many still believe this will eventually happen and might therefore hold on to their coins.”

Bitcoin hodled or lost coins chart. Source: Glassnode

As such, Bitcoin’s realized price – the average price at which all coins last moved – at around $25,000 seems an unlikely target thanks to LTHs’ unwillingness to sell.

While some chose to do so recently, this was thanks to them buying in at highs earlier in 2021 and wanting to cut their losses, Root continued. More broadly, however, those who purchased during Bitcoin’s first trip above $60,000 have chosen to hodl, not sell.

“Conclusion: Some exhaustion coming from the people that bought the run to first 64k peak, but many still holding,” the Twitter thread read.

“Older LTH’s mainly holding strong. No real reason to see a drop below realised price.”

Bitcoin realized price chart. Source: BuyBitcoinWorldwide

Plenty of cold feet over Q2 price action

As Cointelegraph reported, some market participants remain extremely wary about a capitulation event occurring in the coming months for Bitcoin.

Related: BTC could drop to $30K in 2 weeks, trader warns as gold goes for $2K high

Driven by macro, this could see $30,000 return, or worse, the 200-week moving average at $21,000 coming in as support.

All depends on the United States Federal Reserve and its reaction to inflation, they say, this far from clear thanks to the limited scope for containment measures.

Should heavy-handed policy become the norm, however, stocks, commodities and risk assets would be hit hard – heavy headwinds for crypto.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, you should conduct your own research when making a decision.

All Dutch and English crypto news!

Duur grapje: 10.000 bitcoin voor 2 pizza’s

Wist je dat iemand ooit 10.000 bitcoins heeft betaald voor twee pizza's? Op het moment van de transactie leek het een leuk idee: de waarde...

Crypto gaming and the monkey run: How we should build the future of GameFi

You've seen it before. An amazingly talented gaming founder teams up with a top-tier studio, promising to create a wondrous game experience built on the...

How to incorporate a DAO and issue tokens to be ready to raise money from VCs

What is a DAO? A DAO, or decentralized autonomous organization, is an online-based organization that exists and operates with no single leader or governing body. DAOs...

Web3, NFTs, Metaverse: The tools for a truly decentralized future

Attendees to the BlockDown Croatia 2022 festival were witness to Cointelegraph's discussions around sociopolitics of the Web3 ecosystem, non-fungible tokens (NFT) and the Metaverse. It...

Beste exchanges

Koop je crypto bij Bitvavo