Cryptocurrency investors have been focusing on two basic questions lately: How much further can the price of Bitcoin fall and how long will this stagnation in the market last? The majority of investors express the concern experienced by many people who withdraw from the market or wait, especially due to the sharp fluctuations in prices.
Price fluctuation and time-based pressure
Price-related pressure occurs when Bitcoin loses value with sharp movements and the resulting volatility. However, the market’s fluctuations not only in sharp declines but also in certain ranges for long periods of time have become another source of uncertainty for investors. This prolonged inactivity in price is often seen as a sign of a process that wears out both buyers and sellers.
Recently, Bitcoin price has been trading below $66,000. The cryptocurrency, which has lost more than 3 percent in value in the last 24 hours, has fallen by approximately 45 percent compared to its historical peak in October last year. This downward trend, which is approaching six months, causes investors to exit the market or have difficulty maintaining their current positions.
The impact of long-term investors and the approach to the market base
The Realized Cap HODL Waves indicator, developed by on-chain data analysis company Glassnode, makes it possible to follow this consolidation process in the market more closely. The indicator groups the Bitcoin supply according to recent transfer times and weights these groups according to the average on-chain transaction price of the coins held.
Looking at past cycles, during bear market bottoms, the share of investors holding for six months or longer in the total supply reaches at least 85 percent. Historically, while prices bottom out first, long-term investors’ share of the supply usually peaks a few months later. This suggests that long-term investors accumulate assets when prices are low and continue to hold them during the market’s toughest periods.
In the current situation, addresses that have maintained their positions for a long time hold approximately 80 percent of the total supply. Although the fact that this level has been reached indicates that the market is potentially searching for a bottom, it seems likely that the horizontal movement will continue for a few more months in the near term.
