Meltem Demirors, a well-known cryptocurrency bull and the chief strategy officer at digital asset investment firm CoinShares, has revealed she believes the cryptocurrency market correction is shaking out weak hands, as “there are not a lot of long-term holders selling.”
Speaking with CNBC, Demirors pointed out that the cryptocurrency market had “200 days of market expansion,” and investors “can’t have a number go up forever” as that doesn’t happen in any market. What we’re seeing, she said, is a “correction, a contraction, and a lof of what is getting shaken out is what we call the ‘paper hands’, the ‘weak hands.’”
Paper hands is a term used to characterize people who sell cryptocurrencies or other assets when markets turn red. Paper hands are the opposite of diamond hands, which keep holding onto their assets even when prices drop significantly.
Demirors point to activity on the blockchain to support her point, arguing that “a lot of retail entered, didn’t do their research, and is now selling.” Long-term holders, she said, aren’t selling. On-chain data reveals wallets that have been holding for a long time “have actually been using this opportunity to accumulate.”
The strategist’s comments came amid a crypto market crash that saw the price of Bitcoin drop below $30,000 and Ethereum below $2,000, before both cryptoassets recovered. BTC is at press time trading at $34,200.
She added there’s “a lot of uncertainty around policy” and believes the price of BTC is going to continue to see consolidation in the near future as there are also a “lot of negative headlines” affecting the market. All of this, however, is part of a cycle the space goes through every few years.
I think part of this is just the cycle we go through every several years with crypto, but we are seeing a lot of new inflows. We are seeing a lot of activity, in particular, on the market side.
Demirors also noted that as the market dropped there was “a bunch of leverage coming off across the board,” and that the market is now done deleveraging.
The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.