Recent Bitcoin Bull Run and Prior Run-up Data Suggests a Softer Bear Market Is in the Cards

May 4, 2022 Bitcoin.com

Willy Woo: ‘Peak fear’ but on-chain metrics say it’s not a bear market

February 2, 2022 Coin Telegraph

Bear Market

“No doubt about it, people are really scared, which is typically [...] an opportunity to buy,” Willy Woo said.

Bitcoin analyst and co-founder of software firm Hypersheet Willy Woo believes that on-chain metrics show that BTC is not in a bear market despite observing “peak fear” levels.

Speaking on the What Bitcoin Did podcast hosted by Peter McCormack on Jan. 30, Woo cited key metrics such as a strong number of long term holders (wallets holding for five months or longer) and growing rates of accumulation suggest that the market has not flipped the switch to 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.”

I guess BTC is in demand lately pic.twitter.com/5h1IeMT2lK
— Willy Woo (@woonomic) January 29, 2022

In the short term, Woo noted that “you don’t often get this kind of pullback without it relief bouncing” and that a potential capitulation down to the $20,000 doesn’t appear feasible as it would replicate the 2018 crash into a bear market in the space of just three months as opposed to a year.

The price of BTC has declined around 44% since its all-time high levels of $69,000 in November, and the analyst cited institutional futures trading as a key reason behind this steady decline and flat performance over the past three months.

Woo suggested that the increasing influx of mainstream traders and roll out of BTC futures markets over the past few years has significantly changed the market structure of BTC in which the price directly correlates to “risk-on risk-off from macro traders looking at traditional stocks.”

“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,” he said.

The analyst cited a large number of long-term hodlers who haven’t sold for more than five months, traders who stopped selling around the $40,000 region along with a steady rate of accumulation as key reasons to remain 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."

In terms of adoption, Bitcoin has roughly the same users as the Internet had in 1997.

But Bitcoin's growing faster. Next 4 years on current path will bring Bitcoin users to 1b people, that's the equivalent of 2005 for the Internet. pic.twitter.com/Np9yTR3WkL
— Willy Woo (@woonomic) February 1, 2021

He also argued that a key indicator for bear markets is usually when “newbs” or new coin hodlers are in the majority:

“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.”

78 Days: Measuring the Extended Crypto Market Downturn Against Prior Bear Markets

January 27, 2022 Bitcoin.com

Analyst Nicholas Merten Makes Massive Late 2022 Bitcoin Prediction, Says Latest BTC Crash Setting Bull Run Foundation

January 24, 2022 The Daily Hodl

Bitcoin Price Slips Below $36K, BTC Dominance Increases, Billions Leave Crypto Economy

January 22, 2022 Bitcoin.com

On-Chain Analyst Willy Woo Says Bitcoin Approaching ‘Off-to-the-Races’ Phase – Here’s His Timeline

December 23, 2021 The Daily Hodl

Bulls on parade: Galaxy Digital and Alameda pundits tip market recovery

June 25, 2021 Coin Telegraph

Alameda Research

Jason Urban, co-head of Galaxy Digital Trading thinks institutional adoption of crypto is in its early days and predicts BTC is set to reach new all-time highs once the FUD dissipates.

Senior traders from Galaxy Digital and Alameda Research are predicting the crypto market is set to recover once the recent wave of bad news stories subside.

Markets have been in a downturn since mid-May, with Bitcoin (BTC) fluctuating between the low to mid $30K range.

Speaking with streaming financial news provider Kitco News on June 24, Jason Urban, co-head of Trading at Galaxy Digital asserted that once the FUD dissipates by the Fall, Bitcoin should reach new highs and “see something north of $70,000 by the end of the year.”

Urban used baseball as an analogy, saying that institutional crypto investment is only in the “first inning”.

While he believes regulatory uncertainty has held many institutions back from entering crypto markets, once they do enter, increased demand for the limited supply of BTC should drive prices up to new highs.

“I think that as we pull into the Fall, a lot of this institutional adoption and these aspirational moves that we’ve seen will start to manifest itself, and we should see the market take out those highs."

Alameda trader rejects the FUD

Sam Trabucco, a trader at top quantitative crypto trading firm Alameda Research, also believes crypto markets are set to stage a recovery and he questioned the validity of multiple narratives driving the recent levels of FUD.

Word on the street is: this price graph is fucked up. What happened?

A thread about the calm, the storm, and how to tell the difference. pic.twitter.com/QDl3nt1xtj
— Sam Trabucco (@AlamedaTrabucco) June 23, 2021

In a June 23 Twitter thread, Trabucco told his 64,000 followers that the FUD regarding China, U.S. regulations, Elon Musk’s environmental concerns over BTC mining, and concerns over the solvency of MicroStrategy during the Bitcoin dip, have all “constituted an over-reaction”.

The price had earlier also overreacted to the Tesla Bitcoin buy and Musk’s bullish tweets.

“None of that is concrete, though, and people vacillate between over-stating the pieces of news they want to hear and under-stating the ones they don't.”

Trabucco stated that the market activity surrounding bad news events is a predictable phenomenon, but it doesn’t truly affect where the market should be priced long term.

“I think probably none of them *really* mattered in the first place for BTC's "value," or where people should be pricing it medium-term.”

Trabucco asserted that “liquidations are exacerbating” the public over-reaction to price BTC’s changes. He added that no one wanted to sell down to $30K but had been forced to, meaning that it was a great opportunity to buy.

“It seems like MAYBE today marks yet another paradigm switch? We'll have to wait and see -- Alameda's new long positions are sure hoping so,” he said.

In fact, trading at the END of any of these periods is a predictably awesome trade -- the goal is finding it.

It seems like MAYBE today marks yet another paradigm switch? We'll have to wait and see -- Alameda's new long positions are sure hoping so. pic.twitter.com/tHbbhjbcj7
— Sam Trabucco (@AlamedaTrabucco) June 23, 2021

Bitcoin and Ethereum fees slump to six-month low

June 1, 2021 Coin Telegraph

Bitcoin transaction fees

Bitcoin and Ethereum transaction fees have declined down to $7.20 and 4.80 respectively.

The transaction fees of Bitcoin and Ethereum have slumped to six-month lows as the markets cool after the recent crypto downturn.

According to BitInfoCharts, the average price of performing a transaction using Bitcoin has fallen from an early-April all-time high of $62.77 to around $7.20 — an 88% drop over just six weeks.

*Bitcoin average transaction fees - BitInfoCharts*

The falling Bitcoin transaction fees appear to have been driven by a decline in overall market activity, with daily volumes evaporating from more than $67 billion on May 10 to $30 billion as of this writing, according to CoinGecko.

The meteoric 2021 crypto bull-run has seen the average transaction fees associated with using Bitcoin or the Ethereum mainnet frequently skyrocket to unprecedented levels in recent months.

In February 2021, Bitcoin’s fees nearly tripled in two weeks following a Feb. 8 announcement that Tesla added $1.5 billion worth of Bitcoin to its balance sheet.

The news sparked a surge in crypto speculation, with the price breaking its former high of $40,000 before topping out at $54,410. Data from CoinGecko shows that 24-hour volume for BTC increased by nearly double from $57 billion on Feb. 7 — the day before Tesla’s announcement — to $101 billion on Feb. 23.

The average price of Bitcoin fees again surged into a record high of $62.77 on April 21 after the price of BTC spike to tag a local top of $64,804 on April 14. Bitcoin’s fees peaked on April 21 sparked by an increase in market activity as the markets began showing weakness, as traders raced each other to cash out near the highs.

Data from YCharts also shows that average Ethereum fees have dropped from May 20’s record high of $72.21 to just $4.80, a 93% reduction in less than two weeks.

Ethereum average transaction fees - YCharts

Increasing adoption of Ethereum-powered decentralized finance and nonfungible tokens saw average fees increase from $3.50 at the beginning of the year to new highs of nearly $40 by the end of February.

While developers sought to discipline the fee markets through April’s Berlin hard fork, a speculative frenzy surrounding Shiba Inu and other ERC-20 dog tokens drove further congestion on the Ethereum mainnet, again pushing fees to record highs last month.

Ethereum’s transaction fees last established a new all-time high of $71.21 on May 19, with Cointelegraph reporting that a rush of traders racing to exit leveraged positions on-chain amid plummeting crypto prices was responsible for the hike.

Complex smart contract transactions incurred fees of more than 10 times the average at the peak of the market turmoil, with CoinShares CSO, Meltem Demirors, reporting claiming to have paid more than $1,000 for a single transaction.

Survey: Crypto Traders Predict Ethereum’s ROI to ‘Crush’ Bitcoin’s 2021 Year-End Return

May 19, 2021 Bitcoin.com

Bitcoin Drops Below $40K, Crypto Economy Down 17%, Markets Lost $250 Billion Last Week

May 19, 2021 Bitcoin.com

Bull run