Today, Bitcoin went down to nearly $18,600. The losses in the leading digital asset resulted in altcoins falling even harder. At the same time, the market continues to see a growing use of derivatives across most platforms, with the exception of BitMEX.

As of writing, BTC/USD recovered to above $18,840, with the trading volume around $2.43 billion.

$BTC continuing to refine this consolidation range… lower highs, higher lows, eventually we run out of room pic.twitter.com/BbNsLTozsy

— Jonny Moe (@JonnyMoeTrades) December 8, 2020

It needs to be seen how low bitcoin would actually go. One analyst expects the market to surprise with a small drop before pumping to new highs, unlike the 2017 bull market when the average pullbacks were 30% to 40%.

“The ultimate fuck you to everyone is this triangle that literally everyone can see on BTC breaks down, wicks 18k then proceedes to pump,’ he said.

Interestingly, despite the losses and the explosive rally that Bitcoin saw in 4Q20, the digital asset lacks a usual burst of volatility.

The quiet rally: despite all the attention and a powerful rally from $10k to $20k in Q4, #bitcoin has not had its usual burst of volatility pic.twitter.com/aLDwvhwQ8B

— skew (@skewdotcom) December 8, 2020

Since hitting a new ATH, Bitcoin has been ranging with fewer people depositing BTC and stablecoins to exchanges.

The record high actually came after 1,081 days following the accumulation by long-term holders during the bear market. These LT holders then took off profit, selling into buying pressure from new market participants, which brought us a new UTXO floor.

Once this floor is in, weak hands capitulate, leading LT holders to start accumulating and strong hands to dominate, wrote Delph Digital in its latest report on Bitcoin’s bull case.

Even miners have been holding onto more of their BTC earnings with Bitcoin supply held on exchanges down 20% since February, “further strengthening the HODL philosophy.”

According to the report, “bitcoin's publicity-to-market-value ratio is among the highest of any asset in existence today.”

While global M2 increased to over $11 trillion since the end of March, BTC tripled over the same period, yet only represents ~0.4% of global M2.

In this 'everything' bull run, #bitcoin is the fastest horse. pic.twitter.com/v81AaGY6R5

— TradeBlock (@TradeBlock) December 7, 2020

Bitcoin’s momentum is actually strengthening, with the monthly RSI breaking above 70. A similar event at the end of 2016 set up the bull run of 2017.

Despite all the talking about how this bull cycle is different from the last one in the manner that instead of retail, institutions are the one leading the rally, the report states, “the similarities between cycles is striking” with the world's largest crypto asset right on track.

Mass retail speculation and viral memes have actually been swapped for family offices and world-class macro investors this year who are seeing BTC as an inflation hedge in the current environment of endless money printing, it further read.

“The US dollar is currently worth 5,203 sats. 10 yrs ago it was worth 418,760,469 sats. It's pretty clear which one is the shitcoin,” said Tyler Winklevoss, co-founder & CEO of crypto exchange Gemini.

This is why the “goldilocks” environment for Bitcoin is characterized by an acceleration in monetary growth, declining market volatility, weaker USD, & lower real rates.

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