While bearish sentiment is setting in, the Bitcoin network’s metrics paint a more optimistic picture. An eye-catching 11 million Bitcoins haven’t been moved over the past year, hinting that holders were not ready to sell at 2019’s bottom nor at its highs.

No Movement for 11 Million Bitcoins in 2019

According to data provided by BitInfoCharts, over 11 million Bitcoins haven’t moved wallets over the past year. This is seen as a signal of strong confidence from long-term investors regarding the largest cryptocurrency, especially when Bitcoin’s price oscillated from the lows of $3000 to $14000 during 2019.

Denoted as holders of last resort, these investors signal their preference for a long term horizon, rather than seeking short term potential gains.

Bitcoin is a peer-to-peer network, and its strength ultimately derives from its users. In a parallel financial system, Bitcoin is proving to be a highly resilient form of money – having a strong base of holders of last resort – a term coined from the fiat system where central banks act as lenders of last resort.

Holders and Buyers of Last Resort

Generally, when the economy is in a contracting phase, the central bank acts as the lender of last resort. The institution steps in to save banks from falling behind in meeting their debt obligations.

Drawing a parallel to Bitcoin as a financial system, when its price starts falling, buyers disappear and the selling activity accelerates as investors panic sell. When the negative feedback loop of a crisis of confidence occurs, there are two groups that contribute to a reversal of sentiment – holders of last resort and buyers of last resort.

As Bitcoin’s price continues to tumble, the holders of last resort, after all, don’t directly influence the price. However, the buyers of last resort will be critical to stop the prices from falling and break the negative cycle.

At what price level buyers start stepping in is unknown, but judging on past cycles Bitcoin has proven to be extremely resilient with every cycle more users joining the group of last resort holders.

Image courtesy of Twitter, BitInfoCharts, Shutterstock.