With data showing the transition from surrender to savings, Philip Swift says Bitcoin’s risk-reward now offers a great buying opportunity.
Famous analyst Philip Swift says speculators are disappearing from the market and their mood is “destructive”.
The co-founder of trading suite DecenTrader referred to the potential maximum risk returns for Bitcoin at current prices in a tweet on December 14.
Swift: “The Euphoria Was Destroyed” From The Bitcoin Bear Market
The BTC/USD pair is down nearly 70% from its all-time high, prompting many short-term investors to exit.
The FTX scandal led to an even stronger capitulation, and this continues as its fallout has investors worried.
For Swift, the signs that speculators’ “enthusiasm” is leaving Bitcoin are now in the form of the famous HODL Waves metric.
The HODL Waves group traded currencies on a life basis, i.e. how long they were inactive until they left their wallets. The resulting data shows how long-term or short-term the stockholders are trading.
Another iteration of the scale, Realized Cap HODL (RHODL) Waves also weighs these ranges at the actual price, the price at which each bitcoin moved.
“So, RHODL waves tell us the basis for the cost of bitcoins held in wallets at different time periods. Each time period is represented by waves on the chart,” Swift explains in his statement on the private on-chain data resource LookIntoBitcoin.
Currently, RHODL shows a distinct minority of coins moving around the network shortly after they were used in a previous transaction. Instead, transactions currently include coins last moved 6-12 months ago as the most popular age range.
In the accompanying chart, the darker the color of the wave, the more recently the corresponding currencies have moved.
“The enthusiasm of Bitcoin tourists is now completely gone,” Swift commented.
He added that based on the historical trends of RHODL Waves, under these circumstances, the risk-reward ratio (R:R) for investment is the most attractive.
He wrote: “I noticed that Cap HODL Waves enhanced their warm colors during periods of the show when the audience was excited”:
“We are now at the lowest point in the cycle…so the maximum chance is r:r.”
Bitcoin Realized Cap HODL (RHODL) Waves Chart. Source: Philip Swift / Twitter
From surrender to accumulation
Swift isn’t the only one noticing potential bullish signs from Bitcoin as 2022 winds down.
Related: Bitcoin Bear Market Will Last “2-3 Months at Most” – Interview with BTC Analyst Philip Swift
Analytics firm Glassnode highlighted the ongoing trend from “handing over” to “accumulating” by BTC investors in the latest edition of its weekly newsletter, “The Week On-Chain.”
It did this with the UTXO Actual Price Density Meter, a tool similar to RHODL waves that provides an idea of seller density depending on the age of the coin.
“After each stage of the market in 2022, we can see an increase in the intensity of currency redistribution (and thus reaccumulation),” he wrote, noting that the decline from $24,000 saw $18,000 and witnessed a particularly strong reaccumulation.
The accompanying chart specifically shows investors macro peak buying per BTC price from late 2017 through April 2021.
Bitcoin UTXO Real Price Density (URPD) Illustration (Screenshot). Source: Glassnode
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