This opinion editorial is by Shane Neagle (editor-in-chief, The Tokenist). This opinion editorial is by Shane Neagle, the editor-in-chief of “The Tokenist.” Is this a sign that bitcoin’s prospects are fading? The bitcoin case is a short example of this spectrum. It spans only 13 years, but it’s quite wide in terms of price. It ranges from $0-$69,000 The trend upwards in the long-term is evident. The best way to make money selling bitcoin is to be the first to purchase it, even in bear market conditions. Investors who bought bitcoin early and at a lower price had the chance to buy more bitcoin than those who bought it later in bitcoin’s history. These “aged” bitcoins are kept in the same wallet for a long time. This would indicate that the owner is strongly convinced of bitcoin’s long-term value proposition. This activity sends a strong signal the Bitcoin network. Glassnode states that coin days destroyed is a measure economic activity that gives more weight to coins that haven’t been used for a long period of time. CDD is calculated by multiplying a transaction’s number by the number days since the last time they were moved from a wallet. Bitcoin’s volatility is often criticized. There is clear demand for bitcoin even in traditional IRAs. CDD is a popular indicator on-chain that measures the sentiment of long-term holders. It is used to measure whether they see value in bitcoin’s long-term prospects. This range was last seen in 2015 and 2011 but has not been seen since. As the supply-adjusted bitcoin days destroyed (BDD) chart below shows, the highest BDD upticks happened during bull run peaks, which is to be expected as long-term holders lock in their profits.Image credit: LookIntoBitcoin.comIn other words, long-term Bitcoiners — in the context of the asset’s historical selling activity — are continuing to hold bitcoin in large numbers. This could explain why bitcoin’s price activity is relatively stable. These holders could be acting as protections against selling pressure. Do we see a similar pattern in bitcoin’s trading volume? Image credit: bitcoinity.org The above chart shows bitcoin’s trading volume between October 2020 and October 2022. This chart shows a fairly consistent and steady trading volume, roughly from July 2021 to Oct 2022. We don’t see any drop, which is similar to the activity from CDD. The combination of these two indicators — low CDD and steady and consistent trading volume — further suggests the majority of bitcoin traded was by short term holders. The fact is that bitcoin purchased at well below $100 have not moved since 2010/2011. This holding trend contributed to bitcoin’s extremely low volatility. Comparatively, 2018 saw a similar volatility in bitcoin’s price, with a 50% drop in one month, from $6.408 in November, to $3.193 in December. Is it possible that we will see a new bottom, even with long-term Bitcoiners holding firm? This is not good news considering miners have to service their debts by selling mined bitcoin, even at their bottom price point in this bear cycle.Image credit: blockchain.comAlready, one of the largest bitcoin mining companies, Core Scientific (CORZ) — with a share of hash rate around 5% of the network’s total — is exploring bankruptcy. CORZ stock fell by 98.32% in the past year. Argo Blockchain (ARBK), on the other hand, has fallen by 91.56% since October 2022 and is unable sell enough assets to pay the costs. Argo’s October 2022 operational update stated that if Argo fails to secure additional financing, Argo will experience cash flow problems in the near future and would have to cease or curtail operations. These mining companies will likely lower the Bitcoin hash difficulty. However, in a game where survival of the fittest, this could lead to another contagion spiral. The remaining centralized platforms lending money to bitcoin mining companies could cause market sell-offs and vulnerability. The market’s interpretation of the Federal Reserve’s next moves could cause bitcoin prices to rise just enough to allow miners to remain above water. This is due to the Fed increasing the cost of capital and borrowing, which makes the dollar stronger. Investors are often forced to leave risk-on assets like bitcoin. If investors predict a recession, the dollar reigns stronger and investors turn to cash to protect themselves. However, the Fed’s “Fed pivot” should not imply a return to lower interest rate, but a deceleration to possibly hiking only 50 basis points in December (if inflation data favors it). However, this may be enough to prevent a bitcoin bottom from emerging in the current market environment. Long-term holders are more confident than ever about the long-term value proposition of bitcoin. These holders are currently selling bitcoin at one the lowest rates in the history Bitcoin network. These opinions are not necessarily those of BTC Inc.