Bitcoin’s current price action reveals much higher levels of ‘HODLing’ activity than in past bull cycles.

An indicator known as “reflexivity” has been rising over recent months, according to on-chain analyst Willy Woo.

Woo stated that the indicator gauges Bitcoin investors’ propensity to hold onto Bitcoin as the price increases, Cointelegraph reports.

There are numerous reasons why retail investors could hold on to their Bitcoin even more than past cycles.

Should BTC rally next year, the majority of investors would view it as a post-halving bull rally. Taking into account Bitcoin’s tendency to rally after a halving, retail investors may hold on to the currency to stop themselves being priced out should an ongoing robust rally come into play.

In addition, Bitcoin has shown itself to be extremely resilient. Following its initial recovery from the crash back in March due to the coronavirus crisis, it has remained above $10,000 despite several negative events.

More recently, the Bitcoin price dropped after the U.S. Commodities and Futures Trading Commission (CFTC) charged BitMEX with infringing the Bank Secrecy Act.

The Bitcoin price fell under $10,500 after the CFTC announcement, but quickly returned to the $10,700 support level.

Woo stated: “This [reflexivity] is the tendency of HODLers to hold onto their coins harder as price increases. I had expected reflexivity to increase during the mania phase of BULL markets, but it looks quite constant from the last two cycles… This cycle is interesting; reflexivity is increasing rather than static compared to last cycles. While we now need more capital invested to get similar percentage gains in price, the effect of HODLers holding onto coins tighter is magnifying ‘number go up’ per dollar invested.”

In addition, many investors believe the upcoming U.S. presidential election may benefit Bitcoin.
According to Su Zhu, CEO of Three Arrows Capital, a second term for Trump may be to Bitcoin’s advantage, as could a Democratic sweep due to numerous factors: “Biden is extremely bullish for BTC because democrat blue wave could usher in unprecedented installation of MMT agenda w/ corresponding dollar weakness and deficits. With that said Trump is also bullish.”