It’s a slow grind for long-term holders with no significant macro top or bottom in sight, the Reserve Risk metric suggests.
Bitcoin (BTC) investors are famous for their ability to “hodl” through price dips, but new data sheds light on how long they may be prepared to continue.
In a tweet on Jan. 16, on-chain analytics firm Glassnode noted that holder behavior currently mimics how Bitcoin behaves during the least extreme part of its price cycles.
Reserve Risk: Bitcoin price ‘depressed,’ hodlers hodl on
Referring to its Reserve Risk (“R-Risk”) metric, Glassnode argued that current buying and selling trends are not those of a macro top or bottom.
“Low values of R-Risk are characteristic of mid-bear to mid-bull cycles, where prices are depressed, but HODLing dominates onchain,” it explained.
R-Risk looks at the number of days holders choose not to sell versus current price action, resulting, among other things, in an indication of market mindset at a given price point.
Currently, R-Risk is trending downwards, and is flirting with its “depressed” zone.
Bitcoin reserve risk annotated chart. Source: Glassnode/ Twitter
In an explanatory article originally accompanying the metric, Glassnode additionally said that such moves take a longer rather than shorter time to resolve, again suggesting that an event such as this halving cycle’s blow-off top may be a long way off.
“The Reserve Risk oscillator can be seen to oscillate in line with the macro bull/bear market cycles. It has well defined peaks in line with blow-off tops, and lengthy periods of relative undervaluation during bear market bottoms and into early bull markets,” it summarizes.
Miners cool “massive” accumulation trend
The data conforms to the overall impression of long-term BTC hodlers doubling down on their conviction in the face of an unexpected downtrend.
Depending on the source, this corrective period has in fact lasted throughout 2021, and as Cointelegraph reported, there is no sign of capitulation among old hands.
Data from fellow analytics firm CryptoQuant meanwhile shows that miners, who have also been “massively” accumulating in recent months, began keeping their reserves more constant in January. Bitcoin sitting at their production cost, reducing profitability, could be a likely cause.
Bitcoin miner reserve chart. Source: CryptoQuant