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Willy Woo, a Bitcoin analyst and co-founder of software firm Hypersheet, believes that despite peak fear levels, on-chain metrics show that Bitcoin is not in a bear market. On the What Bitcoin Did podcast, presented by Peter McCormack, Woo mentioned key data such as a large number of long-term hodlers (wallets that have held for five months or more) and growing rates of accumulation as evidence that the market has not entered bear territory:
“Structurally on-chain, it’s not a bear market setup. Even though I would say we’re at peak fear. No doubt about it, people are really scared, which is typically [...] an opportunity to buy.”
In the short term, Woo said that ‘you don't frequently see this type of decline without a relief bounce’ and a capitulation down to $20,000 doesn't appear feasible because it would recreate the 2018 crash. Bitcoin price has dropped roughly 44% from its all-time high of $69,000 in November. According to the analyst, who blamed institutional futures trading for the continuous decline and flat performance over the last three months. According to Woo, over the last several years, the entrance of mainstream traders and the launch of BTC futures markets have drastically altered the market structure of Bitcoin in which the price directly correlates to ‘risk-on risk-off from macro traders looking at traditional stocks.’
Woo further said: “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.”
The analyst said there is a huge number of long-term hodlers who haven't sold in over five months, traders who stopped selling at the $40,000 level, and a consistent rate of accumulation are the reasons to stay bullish.
“Most of the coins have been sitting there for longer than five months and people who do that, they’ve held on for five months, they’re not selling at a loss, they will sell when there’s profit to be had and you’ll see that whenever it breaks out of like all-time highs and does a really strong rally."
He also said that the majority of new currency hodlers is a crucial indicator for bear markets:
“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.”