In December of last year, the percentage of Bitcoin ($BTC) investors who held onto the flagship cryptocurrency for lengthier lengths of time set a new all-time high, as HODLers weathered the bad market while waiting for a trend reversal.
According to data from a top digital asset market data company, cryptocurrency markets have had a “very bullish start to 2023,” with $BTC increasing by 25.1% and Ethereum ($ETH), the second-largest cryptocurrency by market capitalization, increasing by 26.6%.
CryptoCompare researchers note in their latest Market Spotlight post that several factors are contributing to the upward trend, including ownership distribution of $BTC, which shows long-term holder percentages have hit a new all-time high of 72.3% in December, which could be expected “following periods of consolidation where long-term holders can accumulate BTC at low prices.”
In the meantime, the percentage of short-term holders fell to a multi-year low in October 2022, implying a “mean reversal is due, with short-term traders expected to enter more BTC positions in the short to medium term.”
According to the paper, Bitcoin’s rally this year appears to be the outcome of a short squeeze, as a significant number of short positions accelerated the rally while needing to buy back the assets they sold to cover their holdings.
Furthermore, the macroeconomic situation has improved, with US inflation currently falling for the sixth month in a row, from 9.1% in June 2022 to 6.5% in December. Inflation in the European Union declined from 10.1% in November to 9.2% in December.
According to CryptoCompare’s study, cryptocurrency markets had “historically low volatility in the last quarter of 2022,” with Bitcoin’s average 30-day volatility being 53.3%. According to the firm, Bitcoin’s average 30-day volatility per quarter in the last five years “has only been lower in Q3 and Q4 of 2020,” implying that a return of volatility is warranted.
According to CryptoGlobe, a crucial technical indicator just signalled that the flagship cryptocurrency’s price has entered an upswing for the first time since December 2021, when BTC fell from roughly $50,000 to $43,000.
Earlier this week, a top cryptocurrency analyst who garnered a big social media following after precisely forecasting bitcoin’s 84% drop throughout that year, from over $19,000 to just over $3,000 in a year-long bear market, predicted through two charts that Bitcoin may touch $150,000 by 2025.
Peter Brandt, one of the world’s most recognised classical chartists, released charts with his nearly 700,000 Twitter followers that suggested $BTC is forming an inverse head and shoulders pattern, which might take $BTC above $30,000 by the second quarter of this year.