“According to the measures that we have been using, it would seem that short-term investors have given up. With respect to hitting a bottom, it is really encouraging news. At 65.7 percent, the percentage of long-term holders has reached a historical high. This indicates that they have been in possession of Bitcoin for minimum of one year. We have got some really strong holds or HODLers here. That is also really excellent news, but it’s possible that a portion of the long-term holders may sell off their holdings before the market reaches its bottom.”
Wood explains that in addition to monitoring on-chain data, she is also maintaining a careful eye on the Bitcoin futures market. According to her, this market is giving hints of a time of heightened volatility for BTC.
“Futures contracts for bitcoin are now trading at a discount to spot prices, and at periods like this, we should anticipate more volatility. Currently, we don’t understand whether it’s going up or down, but you can understand from various measures in the post that our view presently, or our judgment call, is that the subsequent major wave of fluctuation in Bitcoin will be to the positive. This is something that you can understand from other aspects.”
Wood states that in spite of their confidence, they are proceeding with care in the wake of the breakdown that occurred on Terra (LUNA).
“Nevertheless, we are keeping a watchful eye out. You remember, the Terra incident, it was a catastrophe for crypto, and I believe it will provide policymakers even more motivation and cause to come in and oversee a little bit harder with more of a harsh touch than we would predict.”
A total of $40 billion in market value was lost in the collapse of Terra and its related stablecoin, Terra USD (UST), which occurred a month ago.