For investors fixated on NGU (number go up) technology, the past year hasn’t been pretty, with bitcoin down 33 percent over the past 12 months. However, for long-term investors, there are several bullish indicators worth paying attention to.
Long-Term HODLers Have Conviction
When it comes to on-chain market intelligence, Glassnode’s “HODL Waves” chart provides invaluable insight as to bitcoin UTXO (unspent transaction output) age distribution. Put differently, it provides an illustration of when bitcoins were last spent, and how spending patterns change over time.
According to the latest available data, 60 percent of bitcoins have not moved over the past 12 months, suggesting there is a cohort of long-term HODLers that have tremendous conviction, even when the price has collapsed 33 percent over the same period.
Mining Difficulty Hits All-Time High
In January, Bitcoin’s hashrate reached an all-time high, and as of last Friday, Bitcoin’s mining difficulty reached an all-time high of 27.97 trillion hashes.
This is the second time in three weeks that Bitcoin has reached a new all-time high, suggesting that mining is becoming increasingly competitive. To illustrate, Bitcoin’s difficulty was 13.67 in mid-July 2021, shortly after the China mining ban, and is now up 105 percent from its lows.
In addition, Bitcoin’s hashrate continues to trend upwards:
These factors cumulatively speak to a network becoming increasingly secure and resilient – qualities integral to the success of a decentralised, unconfiscatable store of value.
Where To From Here?
On the price front, ongoing volatility should be expected, given the US Federal Reserve’s hawkish pronouncements and institutional perspective that Bitcoin is a “risk on” asset:
However, as Mark Yusko likes to remind us, “price is a liar”, and for those with a long-term horizon there are plenty of reasons to be optimistic.
If anything, current price levels are attractive and an excellent entry-point for dollar-cost averaging into the asset. If you’re ready to start stacking Sats, head over to HardBlock where you can set up your account once and then send bitcoin to your hardware wallet without lifting a finger.
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