Here's Why Many Retail Investors Are Still HODLing Bitcoin

Many retail investors do not want to purchase the wavering BTC again, but data shows that of those in crypto holding, 55% chose to HODL during the last volatility.

The prices of Bitcoin and other cryptocurrencies have decreased, and aside from the positive news that Celsius has repaid all its debts and avoided a massive liquidation, there are few on-spot reasons that are prompting investors to buy Bitcoin and altcoins.

The collapse of several decentralized finance (DeFi) protocols, crypto investment funds, and BTC trading 60% below its all-time high have been weighing on sentiment but a few positive tidbits of data could be an indication that the market is ready to enter a consolidation phase.

Crypto investors believe that the best strategy for investing in cryptocurrency is to buy and hold, or HODL.

According to a recent survey by Appinio, despite the collapse in crypto prices and start of the bear market, "more than half (55%) of crypto investors held their investments in response to the recent crypto-asset market sell-off with just 8% selling their investments."

The study found that a majority of crypto investors still believe in the industry. It also showed that “33% of American investors are invested in crypto-assets,” and that "40% of investors believe Bitcoin presents the best investment opportunity over the next three months."

Investors in the United States have demonstrated their ability to bounce back

In Appinio's survey of American investors, 65% said they were not shaken by the downturn in financial markets and will continue to invest as they did before.

When queried about the most pressing issues facing them, 66% of respondents pointed to rising inflation, 39% cited the state of the global economy and 34% identified international conflict.

According to Callie Cox, the U.S. investment analyst at eToro, these concerns and ongoing uncertainty have formed a “perfect storm of setbacks” for investors.

Cox said,

“Despite these factors, investors across generations are demonstrating a level of maturity and understanding and are not letting emotions dictate important money decisions.”

Bitcoin's price drops to a level that indicates that the market is overbought

In addition to the resilience displayed by crypto investors, several on-chain metrics also indicate that the market may have fallen into oversold territory and is ready for a period of consolidation.

The MVRV Z-score, which uses a combination of Bitcoin’s market value, realized value and z-score, has been a reliable tool to help identify when BTC is “extremely over or undervalued relative to its fair value” according to LookIntoBitcoin.

Bitcoin MVRV Z-score. Source: LookIntoBitcoin
The Bitcoin MVRV Z-score is .

When the red z-score entered the lower green band, periods have been good ones for buying BTC, as have times when the market price dropped below the realized price. This is shown by the blue and yellow lines at the top of this chart.

The Bitcoin Investor Tool provided by LookIntoBitcoin can be used to evaluate potential profits when buying or selling Bitcoin.

Bitcoin Investor Tool. Source: LookIntoBitcoin
Bitcoin Tool for Investors. Source: LookIntoBitcoin

The green-shaded areas on the chart represent periods of time where the price of Bitcoin is at a level that is considered historically low and may represent a good opportunity to buy.

Investors should not rely solely on any single indicator or metric when determining their investment strategy, as the time spent in bear market conditions can vary with the Bitcoin investor tool and the MVRV Z-Score.