Despite 60% retrace, long-term holders are still in business
Jurrien Timmer, global macro director at Fidelity provided many metrics on Bitcoin’s current place in the market and its potential for a reversal. According to Timmer, Bitcoin, as a store of value, is at historic support.
As Timmer has mentioned, the BTC to Gold ratio could be used as a “barometer” for the asset, which is becoming a modern or digital version of the traditional store of value type of asset, which Gold has been for decades.
According to the chart, the ratio remains at major support after pulling back from a local high. The ratio held successfully on the selling pressure on Gold and Bitcoin and is in the process of merging.
Another on-chain metric that is used for determining whether Bitcoin is mainly held by “weak” or “strong” hands remains at the lowest point since the bottoms of 2014 and 2018, suggesting that older coins remain unspent and “younger” ones have already been redistributed.
The metric correlates with an assumption that Bitcoin would enter an accumulation phase after a major correction between May 4 and May 11.
Number of long-term holders have not changed
Despite the 60% decline in Bitcoin, long-term holders are not even close to capitulating or dropping their assets as the metric tracking the number of “old” investors remains at 13% for more than a year.
Compiling the aforementioned metrics and indicators puts Bitcoin in a nice spot, according to a Fidelity analyst. Timmer believes Bitcoin is heavily undervalued in addition to remaining at major support, according to on-chain and technical indicators and metrics.