- Retail investors HODL BTC in anticipation of a bull run in 2021
- Bitcoin has continued to remain strong regardless of numerous negative events
- The forthcoming US presidential election could push Bitcoin’s price higher
Bitcoin News Today – According to on-chain data, there is an increase in HODLing among retail BTC investors that expect the price of Bitcoin to rally in Q1 2021. Data shows that the current price action of Bitcoin is showing higher levels of HODLing activity than previous bull cycles.
Retail Investors Are HODLing Bitcoin for the Long-Term
Willy Woo – an on-chain analyst – said that an indicator called “reflexivity” has been surging over the past few months. He said that the indicator measures the tendency of BTC investors to hold onto their Bitcoin holdings at its price increases. It is an alternative way of gauging the HODLing activity of retail investors.
Bitcoin (BTC) Price Today – BTC / USD
There are a series of reasons why retail investors are holding onto their Bitcoin holdings more than in previous bull cycles. If the price of Bitcoin skyrockets in 2021, many investors would see it as a post-halving bull rally. Historically, Bitcoin has rallied 12-15 months after each halving, hitting a new all-time high each time.
Due to the possibility of Bitcoin rallying after a halving, investors might be holding onto their BTC as a means to avoid being priced out if a strong sustained rally starts.
Bitcoin Has Continued to Remain Strong despite Series of Negative Events
The digital currency has also shown a surprising level of resilience all through multiple potential black swan events. After recovering initially from the crash caused by the pandemic back in March, the digital currency has held gains over the $10k mark regardless of numerous negative events.
Recently, Bitcoin’s price plunged after the US Commodities and Futures Trading Commission charged BitMEX with violating the Bank Secrecy Act. After the announcement, the price of Bitcoin plunged below $10,500 but it recovered quickly to the $10,700 mark. Woo said that this is probably because of the confluence of two major factors. He said:
“This [reflexivity] is the tendency of HODLers to hold onto their coins harder as price increases. I had expected reflexivity to increase during the mania phase of BULL markets, but it looks quite constant from the last two cycles… This cycle is interesting; reflexivity is increasing rather than static compared to last cycles. While we now need more capital invested to get similar % gains in price, the effect of HODLers holding onto coins tighter is magnifying ‘number go up’ per dollar invested.”
The US presidential election is a couple of weeks away, and many believe it would push the price of Bitcoin higher.