Crypto analyst and co-founder of Hypersheet, Willy Woo, states that despite observing “peak fear” levels, Bitcoin is not in a bear market based on on-chain metrics.
Woo was recently interviewed on the ‘What Bitcoin Did’ podcast, hosted by Peter McCormack, in which he pointed to metrics such as the number of long-term holders and accelerating accumulation rates as signs that the market is not in bear market territory. Woo noted that a potential capitulation down to $20,000 doesn’t appear feasible in the short term. This is because it would replicate the 2018 crash into a bear market in just three months, rather than one year. Despite its all-time high of $69,000 in November, BTC has declined 44% over the past three months. The analyst found institutional futures trading to be the major cause for the steady decline.
In his opinion, mainstream traders’ influx and rollout of BTC futures markets over the past few years have significantly changed the market structure of BTC, with the price directly correlated to traders’ “risk-on-risk-off” analyses at traditional stock exchanges.
“You know back in 2019 to 2020, if you looked on-chain at what the investors were doing, they were accumulating but you just couldn’t see any impact of price because the price was really dictated by traders on the futures exchanges,” he said.
Investors who have not sold in over five months and traders who have stopped selling around the $40k region along with a steady rate of accumulation are the main reasons for remaining bullish, according to the analyst.
Additionally, he argued that a key indicator for bear markets is when newbies dominate the market: “The 2018 bear was at peak new guys holding the coins, and the cycle repeats. Those guys either sell, or the ones that don’t become hardened HODLers and they sell on the next rally when it goes even higher.”