However, many of the BTC wallets were unfazed by this sudden collapse and have continued on HODLing. In fact, the cryptocurrency is now posting record high HODL stats despite the big price tank. The value proposition is now there as well, thanks to a popular price metric.
Bitcoin dropped below $33k at one point during the last 24 hours that prompted sellers to panic and they once again offloaded a certain amount that impacted the markets hard. However, by press time, the cryptocurrency had recovered above $35k and a fears of a further bear move were paused, even if for a small instant. Overall, it was yet another day in which bears made further inroads.
The recent downturn in the price index has resulted in many new traders getting nervous. However, the old guard of the cryptocurrency, i.e. HODLers have continued on. According to data from Glassnode and its useful HODL Waves, the number of active HODLers has spiked up considerably. Here is the graph:
An analyst on Twitter also posted these HODLing statistics:
The % of #Bitcoin unmoved for 12 months or more just hit 60%
… which is higher than after the March 2020 COVID crash
… higher than at the end of the 2015/16 bear market
… higher than at the end of the 2018/19 bear market/end transmission
— Alistair Milne (@alistairmilne) January 24, 2022
According to one BTC price metric, the cryptocurrency has entered into the “Value” zone. The Network Value to Transaction (NVT) indicator has been a useful tool for swing traders for a long time and it is now flashing buy signals all over the place.
The metric itself is a measure of whether or not, the BTC price index responds to on-chain activity. It was developed by statistician and famous Bitcoin analyst Willy Woo and Dmitry Kalichkin. It is computed by dividing the cryptocurrency’s market capitalization to its daily on-chain transactional value.
Here is the comparison of the price index with its NVT value:
So, a price reversal may on the cards if the NVT price metric is to be believed. The analysts pointing this analytical detail make some good points and state that the recent downturn in the price index is blown out of proportion and therefore, a likely return to balance is to be expected which is above $40k at least.
However, the ultimate price metric is the BTC index as well. If the cryptocurrency is in for a modest recovery based on the NVT, we shall see it. However, the index has a way of ignoring crucial price metrics for a long time, especially in deeply bullish and deeply bearish markets.
Read all Crypto8 news about Bitcoin here!
Image by Mustafa shehadeh from Pixabay
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