Bitcoin fund Adamant Capital recently released a report stating that Bitcoin (BTC) is in an accumulation phase. Rangebound activity is expected as part of this phase.
Accumulation for BTC
Adamant Capital founding partner Tuur Demeester, along with cofounder Michiel Lescrauwaet, created an in-depth report on Bitcoin’s current price action and status, titled “Bitcoin In Heavy Accumulation.”
The report noted that Adamant Capital’s past Bitcoin evaluations, in 2012 and 2015, had determined that Bitcoin as notably undervalued at the time of those reports. With bitcoin down 75% from its all-time price high, the fund also sees the current situation as “an exceptional opportunity for value investors.”
The report also sees Bitcoin ranging in price, stating, “During this accumulation phase, we expect for Bitcoin to trade in a range of $3,000 to $6,500, until the new bull market permanently cements the denarian cryptocurrency as a multi-trillion dollar asset class.”
Adamant Capital highlighted many different interesting research conclusions in a bullet point summary of its report. “Blockchain analysis suggests Bitcoin whales are now accumulating,” the report said.
The report mentioned considerable correlations to the previous bear market of 2014 – 2015, as well as stating, “HODLers almost break-even, with est. aggregate losses of $3 billion.”
The fund observed the overall recent lack of volatility in the market, which alludes to “retail apathy” and “market bottoming.”
Additionally, crypto exchange break-ins and capitulation from Bitcoin miners might cause “demand shocks.” The report also mentioned that “Bitcoin’s secular bull market is supported by strong fundamentals.”
Other interesting aspects
The extensive report included a plethora of details and analyses as reasoning for its statements.
Regarding rationale for capitulation in 2018, the fund explained that blockchain data indicated a large number of Bitcoins were sold back in November 2018 – Bitcoins that did not often see much movement otherwise, indicating Bitcoin holder selling. The fund noted, however, that 2019 has shown improvement and the accumulation period has begun for crypto’s largest asset.
In the report’s conclusion, the authors stated the belief that bitcoin currently is undergoing accumulation, which indicates that this could be the final bear market phase. Positive investor sentiment is reportedly higher than Bitcoin’s capitulation back in November 2018, and “Bitcoin HODlers are committing for the long term again,” the report said, citing blockchain data.
The report also mentioned that Bitcoin may still see lower price action, but the asset’s fundamentals are building steam.
“We assert that the long term risk-reward ratio for Bitcoin is currently the most favorable of any liquid investment in the world,” the fund states in its conclusion.
Adamant Capital’s report contains significantly more data than covered in this article. Read the full report here.