Wondering whether this is the best time to stock up on bitcoin? It is, at least according to a recent report by Adamant Capital. The report stated that the currency is in its last stage of the bear market; the accumulation phase. Bitcoin HODLers have begun committing for the long term again. BTC’s fundamentals are gaining momentum, the report stated, both as a disruptive technology and a financial asset.
Adamant Capital, founded by the very influential Tuur Demeester, has published two other similar reports. The first one was far back in 2012, with the second one being in 2015. In both periods, BTC was down at least 80 percent from its previous highs. As we now know, in both times, the currency has fought back to set new records. Currently, it’s 75 percent below its 2017 ATH. A precursor for another record-setting bull run? Adamant Capital believes so.
In the current accumulation phase, the currency should trade in a range of $3,000 to $6,500, the report states. Bitcoin HODLers have started to consolidate their positions in readiness for an impending bull run. With the market having experienced capitulation towards the end of last year, many retail traders who were in it for quick profits exited. The result was that most of the people who continued to hold cryptos are strategic and dispassionate investors.
To further support the claim, the report pointed to the low level of volatility in the crypto market since it capitulated in November.
High Bitcoin volatility can be a proxy for the involvement of trigger-happy retail speculators, whereas low volatility tends to coincide with phases of consolidation, apathy, and accumulation. Recently, the Bitcoin 60-day volatility dropped below 5%, a level not seen since late 2016.
The HODLers Are Central to the Future Price Movement
The report put bitcoin HODLers at the center of the future price movement. In the first three quarters of 2018, this group accumulated BTC in the hope that the prices would rebound. However, this wasn’t to be. Towards the end of 2018, many HODLers panicked and started getting rid of their positions. The effect was the fateful Wednesday in November in which the market crashed to its knees.
According to the report, between November 14 and 16, over 70,000 Bitcoin days were destroyed. This was the biggest such move in a year.
Bitcoin days is a product of the amount of BTCs sent with the number of days that these BTCs have been dormant. A high number of Bitcoin days indicates that traders who have held the tokens for long have sold their stashes.
The report further looked at the factors that have been behind bitcoin’s bear market. On top of the list were hacks on exchanges. Back in 2013 when the then-dominant Mt. Gox was attacked, the market crashed by over 50 percent. Adamant Capital conducted a survey last year that sought to find out what is most likely to affect the bitcoin price. According to the report, lack of security expertise was the outright leader with over 84 percent of the votes.
The report concluded by touting bitcoin as the best investment option currently available in the market.
We assert that the long term risk-reward ratio for Bitcoin is currently the most favorable of any liquid investment in the world. We expect for it to trade in a range of $3,000 to $6,500 after which we foresee the emergence of a new bull market