The increased hold indicates that Bitcoin investors are betting on another climb after the halving in 2021.
New data shows that Crypto Wealth is holding more during the current uptrend than in previous uptrends.
According to the blockchain analyst Willy Woo, the metric called “reflexivity” has risen steadily over the past few months. The metric measures how much Bitcoin investors tend to hold onto their money when prices rise. In principle, it is therefore an alternative measure to express the holding or “HODLn” of the investors.
The next halving run could be the strongest
There could be several reasons why investors are holding more now than they have in the past.
One of these reasons is that a possible upswing in the coming year could be the long-awaited climbing party after the Bitcoin halving this year. Historically, Bitcoin has climbed to a new record high 12 to 15 months after a halving. Following this logic, many investors could count on the market-leading cryptocurrency to soar again, which is why they prefer to stop now in order not to have to get back in when it is too late or too expensive.
In addition, Bitcoin has proven to be very resilient this year, even after the crash caused by Corona in March, it was able to climb above the 10,000 US dollar mark and consolidate here.
The latest bad news for Bitcoin came when the American supervisory authority for derivatives trading brought charges against the influential crypto exchange BitMEX, but the market-leading cryptocurrency was able to recover from this as well.
The Bitcoin rate had slipped to 10,500 US dollars after the report by the CFTC, but was then quickly able to heave back over the support at 10,700 US dollars.
According to Willy, the interplay of two factors could be responsible, he explains:
“The reflexivity is the tendency of investors to hold the more, the higher the price goes. I expected reflexivity to increase in an uptrend, but after the last two halvings it has remained the same. The current cycle is out of line because this time the reflexivity increases instead of staying the same. As a result, we need more capital that is invested in order to achieve the same percentage price increase, but at the same time the increased holding has a multiplying effect on the value per invested dollar. ”
Many experts also suspect that the American presidential election could have a positive impact on Bitcoin, which, in connection with the increased holding, would give the crypto currency an even greater boost.
The crypto industry expects the result of the presidential election to be beneficial for Bitcoin.
Sun Zhu, CEO of Three Arrows Capital, thinks that a Democratic victory would catapult Bitcoin to the top for several reasons. However, another term of office for Donald Trump might not be a bad omen, he writes :
“Biden would be very positive for BTC as a Democratic victory would result in a conducive political agenda that coincides with a momentary weakness in the US dollar. Trump wouldn’t necessarily be bad either. “
As Cointelegraph reported this week , veteran trader Peter Brandt is confident that the price development points to a clear upward trend for Bitcoin. Good technical course data, strong fundamentals and a reinforced hold could all be the perfect conditions for a halving climb next year.