HODler, even in the red – The price of Bitcoin (BTC) has been in a downtrend since the start of 2022. This decline, however, hides another encouraging reality for bulls.
Bearish pressures on the surface, massive buying at depth
According to data from IntoTheBlock, bitcoin holders for more than a year increased their balance by 250,000 BTC since the collapse of Terra (LUNA), May 7, 2022. The balance of these addresses reached an all-time high of 12.73 million in Bitcoin.
These massive purchases by HODlers contrast with the movement of the price of Bitcoin in the markets. The price of Bitcoin currently continues to swing back and forth. Also, it oscillates on either side of $30,000, with an incursion above $32,000. BTC still fails to start a real bullish recovery.
A growing number of indicators increasingly argue for a bullish reversal, but such a reversal could only happen in three months, however.
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Bitcoin HODler: digital gold better than its competitor
These massive purchases are also occurring as the US Federal Reserve’s periodic announcements of key interest rate hikes continue to exert strong downward pressure on Bitcoin.
Long-term investors therefore do not seem to be turning away from Bitcoin, which is increasingly gaining the status of an inflation hedge asset.
Cryptocurrency is considered digital gold, and even a better alternative to yellow metal. The transfer of Bitcoin is indeed not subject to the same difficulties as the transport of gold, with risks of theft and seizure in conflict or unstable areas.
The king of cryptos is also said to be better than gold in the realm of scarcity. Indeed, the supply of Bitcoin is capped at 21 million units. Halving the block reward increases its rarity over time.
Its mining difficulty also increases logically with that of the price of the asset. Cryptocurrency mining then becomes even more interesting for miners – further intensifying the competition between them.
Despite hopes of a bullish reversal, a return to $20,000 still possible for Bitcoin. Will long-term investors then continue to accumulate bitcoins if such a scenario occurs?
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