Retail cryptocurrency investors have been wary about buying during the current decline in the price of BTC. However, 55% of those who had already acquired crypto assets prefer to hold amid volatility, according to a survey.
Cryptocurrency and equity markets are bearish, and few reasons drive investors to buy Bitcoin. Meanwhile, lending platform Celsius has paid all its debt and avoided a massive sell-off.
Many decentralized finance (DeFi) protocols and cryptocurrency investment funds have collapsed, while BTC is trading 60% below its all-time high. However, some positive data indicate that the market might be ready to enter a consolidation phase.
Crypto Investors Refuse to Sell their Holdings
A recent survey by the market research platform Appinio showed that over half of cryptocurrency investors maintained their holdings. Despite the collapse in prices and the beginning of the bearish market, only 8% choose to sell their coins.
That behavior suggests that the investment conviction of most cryptocurrency holders is still firm. While 33% of US investors prefer to buy crypto assets, 40% believe Bitcoin will offer the best opportunity in the next three months.
American Crypto Investors Resist despite the Market Collapse
Despite the drop in the overall financial markets, 65% of those US investors surveyed remain confident in keeping their investments.
Concerning their most pressing short-term concerns, 66% of the respondents mentioned rising inflation. In addition, 39% highlighted the current state of the world economy, while 34% referred to international conflict.
Callie Cox, an investment analyst at eToro in the US, expressed his position on those concerns. He believes their continued uncertainty and the cost of living and housing have created headwinds for investors.
Cox said that investors of all generations demonstrate a maturity and understanding level, not letting emotions dictate crucial monetary decisions.
The Price of Bitcoin Enters Oversold Territory
Besides the resistance by crypto investors, various on-chain metrics suggest that the market has reached oversold territory and is ready for consolidation.
The MVRV Z-Score combines Bitcoin Market Value, Realized Value, and Z-Score. That indicator has helped identify when BTC is grossly overvalued or undervalued regarding its fair price.
Those periods when a red Z-Score enters the lower green band have represented excellent opportunities for buying BTC. The same has happened when the market price has dropped below the realized price.
The green areas on the above chart represent periods in which the price of Bitcoin has been low. They may represent an excellent opportunity for buying the crypto asset cheaply.
The time spent in bearish market conditions varies and can become lengthier, so investors should not base their decisions on only one metric or indicator.
BTC is trading at around USD 21,676 and has accumulated a 5.5% gain over the last seven days. While its daily trading volume is above USD 25.69 billion, its market capitalization is about USD 413.76 billion, according to CoinGecko.
By Alexander Salazar
