Currently the top digital asset is down 32% from it’s 2019 high of $13,739 and short-term price action remains bearish. However, a number of market analysts remain bullish.
Cointelegraph reports that over the last two weeks “Bitcoin formed an M-top at $13,739 and $13,177 before dropping to the neckline around $9,600. So what factors are inclining some analysts to take a bullish view of the market?
There are lots of HODLers
First, Coin Metrics released a report showing Bitcoin’s untouched supply has reached a new all-time high of 21%: “The amount of unmoved Bitcoin has increased significantly over the past five years and coins falling into this category have been held in the same wallet address for 180 days to 2 years.,” Cointelegraph states. This is due to the HODLers. It also suggests that bitcoin is seen as a store of value, or another form of savings account, rather than an asset you use to pay for goods. The article says this potentially means that if bitcoin’s price continues to rise, so would the amount of unmoved bitcoin.
Horus Hughes, writing for Cointelegraph points out that not everyone agrees with this analysis. Adamant Capital founding partner Tuur Demeester takes an opposing view: “I’m not so sure […] 5 years without updating your cold storage method is a long time in Bitcoin. Imo most of these coins are likely lost.”
But Hughes counters this by saying, “taking a deeper look at the Coin Metrics chart shows that the number of untouched coins on the 1800-day and 1-year time frame has noticeably increased with compared against longer-time frames. This increase also aligns with bitcoin’s price increase in U.S. dollars. “
Essentially, there is a correlation between bitcoin’s price and the amount of “wallet addresses holding the digital asset as a store of value.”
Crypto analyst Plan B suggests another way of looking at it is based on “miner capitulation.” He said, “We saw difficulty bottoms (miner capitulation) in Dec 2011 ($4.6), May 2015 ($230) and Dec 2018 ($3,896). Price continues to rise from these bottoms until ATH around 100x […] Implying a continuing uptrend until $370,000 ATH.”
The 2020 halving event
And another crypto analyst with the handle Filb Filb, is convinced that despite the current correction, bitcoin price won’t revisit its 2019 low of $3,120. Filb Filb said: “Miners sell into market demand every time the revenue per bitcoin rises above mining costs and he expects that they will ‘limit selling’ as the pre-halving event approaches to invoke the new halving bubble.”