Bitcoin creeps back over $40K, with buying pressure from long-term hodlers

Bitcoin returned above $40,000 on February 4 after a near 6% drop a couple of days before, and BTC is trading up 8.3% on the week. The market has turned bullish, however, the Bitcoin Fear and Greed Index is still pointing to extreme fear. Bitcoin’s selling pressure seems to have diminished as the premier cryptocurrency is trading around $40,300 at the time of writing.

Zooming out, BTC is still down 41.5% from its all-time-high at $69,044 on the 10th of November last year. Looking at this year, bitcoin is down about 15% since January 1st.

Most assets are trading in the green

In the broader cryptocurrency market, most assets were trading in the green at press time. Ethereum (ETH), the second-largest cryptocurrency by market cap, has its sights on the $3000 mark but is trading at $2940 at the time of writing, up 1.8% on the day and up almost 22% on the week.

According to Coingecko data, Ethereum is still down 39.5% from its all-time-high at $4878, also set on the 10th of November, despite a strong increase the past seven days.

As the Crypto Fear and Greed Index, an index that measures market sentiment, remains in ”extreme fear,” traders still seem to be in a fearful mood.

Buying pressure is coming from medium- and long-term holders

Speculation seems to have calmed down in the market as the number of Bitcoin addresses holding the asset for less than one month has decreased by 32.07% since the 28th of December, according to analytics data from IntoTheBlock. As per this data, it seems as the buying pressure is coming from medium- and long-term holders who have been accumulating at recent prices.

Speculation has faded from the #crypto markets.

The number of $BTC traders – addresses holding for less than 1 month, have decreased by 32.07% since December 28th.

The buying pressure is now coming from medium and long-term holders which have been accumulating at these prices. pic.twitter.com/xkIt10TKBW

— IntoTheBlock (@intotheblock) February 3, 2022

This shift in buying pressure is confirmed by data from Santiment as well. According to the on-chain analysis, Bitcoin’s trading volume saw a series of major spikes this past year, almost all after price drops. Crypto bulls look for lowering trading volume when BTC falls, as it indicates minimal interest by the crowd, and higher probability of a reversal.

Also from Santiment data, many so-called altcoins have quietly crept back and inched toward their pre-slide prices. Particular standouts over the past 7 days include MANA (+22%), XTZ (+31%), MKR (+32%), QNT (+53%), and CCXX (+65%).