The HODL Theory And Its Relevance With Bitcoin
HODL Theory and Bitcoin
Modified Date:- Published Date:-Categories: Bitcoins
The HODL Theory AndIts Relevance With Bitcoin
The HODLstory for Bitcoin [BTC] has slowed down recently. The market has changed infavor of quick gains, which has hurt Bitcoin’s performance. Especially interms of its capacity to meet medium- to long-term goals.
In the pastsix months, Bitcoin’s price action has been confined to the lower range afterfailing to reach its mid-term targets. This is true even though there was asignificant discount at the time and significant accumulation during drops.The180-day Market Value Realized Value (MVRV) ratio for Bitcoin, which has beennegative for the previous six months, is evidence of this result.
Thesix-month total supply of profit for bitcoin is currently at its lowest level. Thedecline throughout this year demonstrates that HODLers who purchased Bitcoinearlier are still in the red. Additionally, it supports the idea thatinvestors who made more recent purchases near the June lows made some money inthe short term. The prevailing opinion is that quick profits have been morefavorable regarding Bitcoin’s profitability. This result implies thatsignificant purchasing pressure in recent months was restricted to the limitedupside.
Thestrategic adjustment in favor of short-term chances may have been influenced byBitcoin’s robust recoveries following each dip. Because Bitcoin is currentlyfocused on short-term profitability, it is now simpler to anticipate sellpressure and price floors. For instance, the price range of around $20,000 has shownconsiderable demand during the retest of 2017 highs. Additionally, Wyckoff accumulationand distribution are shown in this result.
Macroeconomiccircumstances heavily influence the current inclination for short-term gains.The hawkish attitude of regulators has been exerting pressure on thecryptocurrency and commodities markets. As a result, the chances of asignificant bullish recovery shortly have diminished.
Despiteshort-term profit-taking, many investors are still stocking up in anticipationof a long-term rebound. Long-term hodlers are still investing by dollar-cost averaging,especially when the bear market is nearing its end. Additionally, given thatholding at lower prices will restrict its downside, Bitcoin may be close to thefloor price of its current cycle.
This article will begin with a brief review of Bitcoin [BTC]’s past and present, then look at its current state and the impact it has had on the cryptocurrency markets. We will then find out how all these factors play into the future of Bitcoin, where we will discuss which aspects of it are promising and which ones need to change to stay relevant in today’s market.