Investors HODL Bitcoin until 2021
According to Cointelegraph, a report based on on-chain data, shows that retail investors are HODLing their Bitcoin in the expectation that there will be a rally in 2021.
Although Bitcoin’s price is trending upwards at the moment, the data says that compared with other bullish cycles, there is definitely more HODLing activity right now. Analyst Willy Woo there has been an increasing amount of what he calls ‘reflexivity’ in recent months. He explained that this is an indicator measuring “Bitcoin investors’ tendency to hold onto their BTC as its price rises,” and that it is another way of assessing the activity of retail investors.
Why retail investors are HODLing
There are a number of reasons why these investors are keeping hold of their BTC right now, and why it is happening more than in previous bull runs.
One reason is connected to the halving that happened in May 2020. Historically, BTC has rallied 12 to 15 months after each halving, recording a new all-time high each time. Therefore, “based on the tendency of BTC to rally after a halving, retail investors might be holding as a strategy to avoid being priced out if a strong sustained rally begins.”
Another reason is that BTC has shown resilience during the pandemic. After its initial recovery from the pandemic-induced crash in March, it has stayed above $10,000 despite numerous negative events. It also fell after BitMEX was charged by the CFTC with violating the bank Secrecy Act, but again BTC showed a quick recovery.
And, as we come to the last quarter of 2020, some “industry executives believe the U.S. presidential election could benefit Bitcoin and the positive HODLing data could further buoy BTC price.”
Su Zhu, the CEO of Three Arrows Capital said, “Biden is extremely bullish for BTC because democrat blue wave could usher in unprecedented installation of MMT agenda w/ corresponding dollar weakness and deficits. With that said Trump is also bullish.”
Traders believe the combination of favorable technicals, strengthening fundamentals, and rising HODLing activity could buoy a BTC bull run in 2021.
Are you HODLing your Bitcoin and hoping for a better 2021?
