“No doubt about it, people are really scared, which is typically […] an opportunity to buy,” Willy Woo said.

Bitcoin analyst and co-founder of software firm Hypersheet Willy Woo believes that on-chain metrics show that BTC is not in a bear market despite observing “peak fear” levels.

Speaking on the What Bitcoin Did podcast hosted by Peter McCormack on Jan. 30, Woo cited key metrics such as a strong number of long term holders (wallets holding for five months or longer) and growing rates of accumulation suggest that the market has not flipped the switch to bear territory:

“Structurally on-chain, it’s not a bear market setup. Even though I would say we’re at peak fear. No doubt about it, people are really scared, which is typically […] an opportunity to buy.”

In the short term, Woo noted that “you don’t often get this kind of pullback without it relief bouncing” and that a potential capitulation down to the $20,000 doesn’t appear feasible as it would replicate the 2018 crash into a bear market in the space of just three months as opposed to a year.

The price of BTC has declined around 44% since its all-time high levels of $69,000 in November, and the analyst cited institutional futures trading as a key reason behind this steady decline and flat performance over the past three months.

Woo suggested that the increasing influx of mainstream traders and roll out of BTC futures markets over the past few years has significantly changed the market structure of BTC in which the price directly correlates to “risk-on risk-off from macro traders looking at traditional stocks.”

“You know back in 2019 to 2020, if you looked on-chain at what the investors were doing, they were accumulating but you just couldn’t see any impact of price because the price was really dictated by traders on the futures exchanges,” he said.

The analyst cited a large number of long-term hodlers who haven’t sold for more than five months, traders who stopped selling around the $40,000 region along with a steady rate of accumulation as key reasons to remain bullish.

“Most of the coins have been sitting there for longer than five months and people who do that, they’ve held on for five months, they’re not selling at a loss, they will sell when there’s profit to be had and you’ll see that whenever it breaks out of like all-time highs and does a really strong rally.”

“The 2018 bear was at peak new guys holding the coins, and the cycle repeats. Those guys either sell, or the ones that don’t become hardened hodlers and they sell on the next rally when it goes even higher.”