The price of Bitcoin fell below the psychological threshold of $30K, scaring investors. It was preceded by the loss of the dollar peg by UST's stablecoin and the Luna crash. 

In this context, more predictions are being made about Bitcoin's demise and the collapse of the entire cryptocurrency market. But let's not make an already grim situation worse. At this point, everyone needs to remain cool-headed.

It used to be that price swings for Bitcoin and other cryptocurrencies didn't discourage HODLers from hanging on to them. Is this changing? It seems so. 

The extreme fear on the market is evidently causing small holders to panic and sell off their holdings.

Chart

Source: Alternative.me

However, whales seem to be quietly buying the dip, with a surge in their activity starting in early February 2022 and steadily staying around that level. The number of wallets holding more than 1,000 BTC reached 2,224 on May 18, 2022.

Chart

Source: Lookintobitcoin.com 

Detailing things a bit more, here's a screenshot of the activity for the richest Bitcoin address that doesn't belong to the exchange 1P5ZEDWTKTFGxQjZphgWPQUpe554WKDfHQ that I investigated in my previous articles. It appears to be accumulating the flagship crypto, not getting rid of it. On May 7, 2022 it bought a sizable chunk of 1,000 BTC when it was worth around $36K and then on May 14, it piled up more 553 BTC when the flagship crypto traded at around $30K. 

Chart

Source:  Bitinfocharts.com

It is important to view technical analysis along with fundamental analysis, as technical analysis alone cannot be relied on. But here's what it says: 

Below is the Realized HODL Ratio chart which analyzes the ratio between RHODL bands of 1 week versus RHODL bands of 1-2 years and can identify with high accuracy each price high of Bitcoin's previous macro cycles.

The RHODL Ratio has the ability to predict Bitcoin's pullback when the line enters the upper red band, and it can also predict its rally after spending time within the lower green band. As it stands, the line is heading towards the lower green band, meaning that the price of BTC may start to rally after spending some time there as it has historically done throughout its entire existence. 

Chart

Source: Lookintobitcoin.com

The current economic climate is very different from the past, with the global economy on the verge of collapse. Bitcoin is still considered a risky asset, weighted by the same factors as stocks. As long as it has both a huge technology potential and a store of value, it has a strong chance of decoupling itself from traditional assets. Basically, it's not the same as traditional assets; the public just needs to change their perception of it. I do believe this will happen and we will soon see Bitcoin’s incredible growth.


Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Join Telegram

Recommended content


Recommended Content

Editors’ Picks

Vitalik Buterin slams controversial gambling project ZKasino following scam allegations

Vitalik Buterin slams controversial gambling project ZKasino following scam allegations

Ethereum founder Vitalik Buterin took to Warpcaster, a new type of social network, to condemn ZKasino, a decentralized gambling platform based on Layer 2 Ethereum protocol zkSync.

More Cryptocurrencies News

Starknet jumps 2% after notice inviting specific groups to claim STRK airdrop

Starknet jumps 2% after notice inviting specific groups to claim STRK airdrop

Starknet Foundation addressed the groups within the STRK community that were unable to receive the token’s airdrop during the first round. The Layer 2 chain organized an airdrop event in February.

More Cryptocurrencies News

XRP price capped at $0.55 despite retail holdings nearing all-time highs

XRP price capped at $0.55 despite retail holdings nearing all-time highs

Ripple price (XRP) failed to break resistance at $0.55 early Wednesday as traders continue to digest Ripple’s recent response to the Securities and Exchange Commission’s (SEC) allegations of illegally selling XRP as a security. 

More Ripple News

Binance founder Changpeng Zhao could face three-year jail time

Binance founder Changpeng Zhao could face three-year jail time

US prosecutors are requesting Binance founder and former CEO Changpeng Zhao (CZ) to serve a three-year jail time, according to a Reuters report published Wednesday. 

More Binance News

Bitcoin: BTC post-halving rally could be partially priced in Premium

Bitcoin: BTC post-halving rally could be partially priced in

Bitcoin (BTC) price briefly slipped below the $60,000 level for the last three days, attracting buyers in this area as the fourth BTC halving is due in a few hours. Is the halving priced in for Bitcoin? Or will the pioneer crypto note more gains in the coming days? 

Read full analysis

BTC

ETH

XRP