Glassnode, a market intelligence portal, has revealed that Bitcoin has dropped by 50% in the past five months, but investors are still holding on to the cryptocurrency. The platform said that investors are still keeping their coins hoping for an upsurge, despite the current poor performance of the cryptocurrency.
1/ UTXO metrics suggest that investors are staying put despite being at a loss.
After #BTC‘s local top in June, fewer transactions require less UTXOs to be created.
That in combination with the declining price, caused the number of UTXOs in a loss to remain at ATH since weeks. pic.twitter.com/nGctzxaYl9
— glassnode (@glassnode) December 15, 2019
According to Glassnode, UTXOs would be created for fewer transactions. But the dwindling price has caused the number of UTXOs to increase considerably in the past few weeks. This shows that a lot of investors are still keeping faith in Bitcoin, even though there could be more dip in the value of the cryptocurrency. They are still hoping that the dip in value will be straightened in due cause to pave the way to rise.
Investors not Unfazed by the Short-term Pullback
As the bear market continues in December, experts are saying this trend will continue for a while. But investors are still holding on tight to their Bitcoin, as they are anticipating an upturn in their fortunes. The investors are hoping that the bear market in Bitcoin is gradually coming to an end, and would not want to miss out when it starts rising again.
Why Investors are still Holding On
There are no serious events in the next few weeks that suggest Bitcoin could bounce back. But there are few events they are hoping to capitalize on next year. In 2020, there will be more regulated cryptocurrency custodians. Also, May next year would see the beginning of block reward halving. These two events could pave the way for the rise of cryptocurrency.
Investors are hoping that these events could help the rise in the value of Bitcoin. Consequently, the Skew crypto data platform shows that investors are currently hanging on for this rise, which they believe would not take long.
Last month, the most active crypto market was the European market. Recently, billionaires like Bill Pulte and Mark Cuban have started paying more attention to Bitcoin. It shows that the traditional financial sector is still paying attention to the activities of Bitcoin, despite its drop in volume and value.
For this reason, investors believe the bear market of Bitcoin would not last long since there are so many indices that indicate so. A lot of stakeholders are paying close attention to the cryptocurrency. And the regulation of cryptocurrency custodians would help to keep the coin in good shape.
Investors still have to be Alert
Investors still need to evaluate market fundamentals such as transaction value in USD, unique addresses, as well as hashrate. These are important long term indices that could determine the value of Bitcoin in the market.
For the short term, investors need to look at the likelihood of miner capitulation, lower time frame levels, and the volume of Bitcoin. Experts have noted that anything is possible in a volatile market.
The fact that Bitcoin has risen to unprecedented levels within a space of few years means it could still depreciate father than its current value. According to Josh Rager, a cryptocurrency expert, Bitcoin could still fall below the $5000 if the sentiment around the cryptocurrency changes.