Bitcoin analyst and co-founder of software company Hypersheet Willy Woo believes on-chain metrics show BTC is not in a bear market, despite observing “spike fears.”
In a speech on the What Bitcoin Did podcast hosted by Peter McCormack on Jan. 30, Woo quoted key metrics such as a large number of long-term holders (wallets last five months or more) and growing accumulation rates indicate that the market has not flipped the switch into bear territory:
“Structurally, it’s not a bear market setup. Although I would say we are at the height of fear. No doubt people are really scared, which is typical […] an opportunity to buy.”
I think BTC is in demand lately pic.twitter.com/5h1IeMT2lK
— Willy Woo (@woonomic) January 29, 2022
On a short-term basis, Woo noted that “you don’t get this type of pullback very often without relief bouncing back” and that a possible capitulation to the $20,000 doesn’t seem feasible as it would repeat 2018’s bear market crash in the period of just three months as opposed to a year.
BTC’s price is down around 44% since its all-time high of $69,000 in November, and the analyst cited institutional futures trading as the main reason for this steady decline and flatness over the past three months.
Woo suggested that the increased influx of mainstream traders and the advent of BTC futures markets in recent years have significantly changed the market structure of BTC, in which price is directly linked to macro risk-on-risk-off -correlated to traders looking at traditional stocks.”
“You know, in 2019-2020, if you looked at what the investors were doing on the chain, it was piling up, but you just couldn’t see the impact of the price, because the price is really driven by the traders on the futures exchanges was dictated.” he said.
The analyst cited a large number of long-time traders who have not sold in more than five months, traders who have stopped selling around the $40,000 region, as well as a steady accumulation rate as the main reasons to remain bullish.
Related: Bitcoin price is approaching $40,000 but professional traders are still skeptical
“Most coins sit there for more than five months, and people who do that have lasted five months, they don’t sell at a loss, they will sell when there is a profit, and you’ll see that when it’s over.” breaks out of all-time highs like this and has a really strong rally.”
In terms of adoption, Bitcoin has about the same users as the internet did in 1997.
But Bitcoin is growing faster. The next 4 years on the current path will bring Bitcoin users to 1 billion people, equivalent to 2005 for the internet. pic.twitter.com/Np9yTR3WkL
— Willy Woo (@woonomic) February 1, 2021
He also argued that a key indicator of bear markets is usually when “newbs” or new coinhodlers are in the majority:
“The 2018 bear was at the peak of new people holding the coins and the cycle repeats itself. These guys either sell, or the ones that don’t become die-hard hodlers, and they sell at the next rally when it goes even higher.”
