The analysis of the various indicators that intervene in bitcoin development in the cryptocurrency market allows us to evaluate the types of Bitcoin holders that exist and their capitalization in the short and long term.
These analyses have determined that the digital financial market is going through the coldest stage of the crypto winter.
Types of Bitcoin holders
There is a very particular way to identify the types of holders that exist in the cryptocurrency market and specifically for Bitcoin; this is usually conditioned based on the time in which they store their digital asset units.
There are long-term holders, all those investors who usually keep their funds invested in Bitcoin for over 150 days.
Unlike short-term holders, all those Bitcoin users can store their cryptocurrency units in less than 150 days.
It is interesting to know this information since various benefits are generated from it about the rewards that this type of investor can obtain.
One of the most efficient methods in the digital financial market to control the volatility factor is the financial strategy known as HODL, which is nothing more than buying and storing cryptocurrencies for the long term.
This strategy benefits investors in the long term because Bitcoin is constantly changing concerning its price, making investors maintain high anxiety levels and more quickly develop the fear of losing everything.
For short-term holders, the situation is usually different because their investment portfolio is closely linked to changes in the trend of the cryptocurrency financial market.
What is happening with the Holders in the long term?
Long-term holders (LTH) may also experience phases where the profits are not what they expect; it is evident in such a volatile financial market that these types of investments are not exempt from losses. However, they occur in a lesser proportion. LTH investors usually evaluate their profits and losses through a simple mathematical calculation relating to the digital asset’s purchase price and the digital asset’s sale price.
When the digital financial market enters an overheating stage, it is where LTHs tend to spend more, which refers to the fact that they buy cryptocurrencies in a more significant proportion. Therefore, the subsequent returns are higher in the bear phases market long-term holder investors experience losses because the possible sale prices are usually much lower than the initial value of the cryptocurrency.
Although many theories regarding the bear market have been experienced during all the months that have passed in 2022, it is assumed that this phase began in mid-June of last year.
If this is so, we could face a possible end of the crypto winter where more than one investor in the digital financial market will begin to see profits.
Where is the capitulation?
According to data that has left as a reference the bearish periods of 2012, 2015, and 2019, where the historical lows were below the acquisition price of digital currencies, the digital market could have touched its lowest floor when Bitcoin touched the price of 18,000 dollars.
It would imply an end to the downtrend because the capitulation of investors known as long-term holders would be going through the price that represented the limit between gains and losses in their investment; that is, they passed the barrier of purchase costs, which in itself is a price that does not generate utility.
Possibly the holders consider this a new investment opportunity because Bitcoin has proven to bottom out. Although usually, the capitulation stage is the one that shows the loss of interest in investments since the established goals were not achieved, the holders are a fundamental piece since they help develop that bottom level needed to make a trend reversal.
Conclusion
It may not happen from one day to the next, but the price levels that Bitcoin has reached during this bearish phase are pretty low. Therefore, the recovery can be slow and last up to months. To date, it has not been seen that Bitcoin does not recover, so everything is a matter of time and that all the investors that are part of the cryptographic ecosystem begin to operate traditionally to give a relevant change to the market in general.
