The new year began and things looking better for Bitcoin. In this article, I will share indicators showing how retail adoption is increasing despite the ongoing bear market and why you should be cautiously bullish on Bitcoin.
Let’s start with this chart from Google Trends. It shows the relative search interest for ‘how to buy Bitcoin’ and other related terms over time.
A few things strike the eye:
- Search interest during the 2021–22 bear market was above that of the 2018–19 bear market.
- Over the past few months, we’ve seen a sustained surge in search interest.
The takeaway: More people are interested in buying Bitcoin and cryptocurrencies. The recent increase in interest could be a sign of the possible start of the next bull market.
In 2022, we saw fewer new crypto ATMs being installed. Nevertheless, last year more than 4.000 ATMs worldwide started their service, although some countries like the UK banned their operation.
The next chart shows the number of total subscribers on the Bitcoin subreddit.
Through 2022, the subreddit has seen sustained and strong growth and now reached 4.8 million users.
The takeaway: This is another sign that retail has continued strong interest in Bitcoin.
This assumption is confirmed when we look at Bitcoin on-chain data on Looknode.
The chart above shows the number of Bitcoin wallets holding more than 0.1 BTC. The number of these wallets rose sharply and is currently at an all-time high.
As the chart below shows, virtually the same picture emerges for wallets holding more than 1 BTC.
Another very positive indicator is the 2Y+ HODL wave. It tracks the percentage of BTC in circulation that has not moved for at least 2 years.
Here we need to note the following things:
- After the 2017–18 peak, the HOLD wave dropped massively — a sign that many buyers were not holding their coins for the long term.
- After the 2021 peak, there was no comparable sell-off. Many more buyers held their bitcoins.
- Currently, the HODL wave has reached an all-time high. In other words, more and more people are confident that Bitcoin will appreciate strongly in the future.
The takeaway: Retail used the 2022 bear market to buy Bitcoin cheaply. Additionally, they seem determined to hold onto their coins for the long term. Against the background of the troubled Fiat system, this is not surprising.
So things are looking promising overall. But what about the price?
Also looking good.
This comes from Bitcoin_Schmitcoin who for me is one of the best macro crypto price analysts on Twitter. He sees GBTC (an investment fund which buys Bitcoin) and CME Bitcoin futures breaking out.
He interprets this as strong bullish signs.
2023 — The year the bull market returns?
So let’s summarize. Various indicators show that Bitcoin is in a much better shape than it was during the last bear market in 2018–19. In addition, in the last few days we are finally seeing positive price momentum again in a long time.
Will the bull market return 2023?
I remain cautiously optimistic. There are still a lot of ambiguities for me. Bad news about Binance and DCG and the generally lousy state of the global economy are a threatening backdrop for me. One wrong decision by the Fed and the situation can quickly change again.
That’s why I will remain very cautious for the coming weeks and months and see how things develop.
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