nickthomas2@benzinga.com
4 min read
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The cryptocurrency market has entered what many refer to as the "diamond hands" phase — a term used to describe investors who hold onto their assets with unwavering conviction, regardless of market volatility or downturns. According to recent data, centralized exchange spot trading volumes have dropped to levels last seen in October 2020 — just before Bitcoin began its historic climb to $69,000. This suggests that many holders are refusing to sell, even amid low activity and uncertain conditions.
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The chart reveals a dramatic divergence between Bitcoin’s price action and trading behavior. While Bitcoin has maintained elevated prices above $80,000, the trading volume patterns paint a picture of a market in transition:
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Spot trading volumes have collapsed to approximately $965.6 million USD
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Futures trading activity remains relatively subdued compared to previous peaks
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On-chain movement has similarly decreased, indicating coins are staying put in wallets
This volume compression is particularly striking when viewed against Bitcoin’s price trajectory, which has remained resilient despite reduced trading activity.
The shift into “HODL mode” — a term originating from a misspelling of "hold" and now widely used to describe the strategy of holding onto crypto assets through volatility — represents a fundamental change in market psychology and behavior:
Supply Side Dynamics:
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Long-term holders are refusing to sell despite significant price appreciation
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Reduced coin circulation creates artificial scarcity
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Lower trading volumes suggest conviction rather than speculation
Market Maturation:
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Institutional adoption may be reducing retail trading volatility
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Bitcoin ETF inflows could be absorbing selling pressure
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Corporate treasury adoption creates permanent demand sinks
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The October 2020 comparison is particularly relevant because that period preceded Bitcoin’s most explosive bull run. During that time:
