Bitcoin Investors HODLing Again as BTC Enters the Last Stage of Bear Market: Adamant Report
According to the latest report titled “Bitcoin in heavy Accumulation” by Adamant Capital, there has been a monthly change among the long-term Bitcoin holders. Bitcoin investors held onto more accumulated gains in the first three-quarters of 20018 than they could afford to lose. Moreover, they even grew their net exposure to the flagship cryptocurrency, in the hope of a rebound.
However, as price dipped below $6k, things changed as holders panicked and sold off coins. In November 70,000 Bitcoin days were destroyed and then in early December, Coinbase reshuffled its own coins (5 percent of total supply) that exacerbated a general market selloff. The situation improved as we entered in 2019.
The report says value investors that are “strong hands” are not in a rush and happy to accumulate and buying the dips. While the “weak hands” who didn’t expect the duration and brutality of the winter end up selling and capitulate.
“During the accumulation phase, the market will trade in a range: the weak hands, who are trying to get out of the market, take profit during rallies and thus create the resistance, and the strong hands, looking to accumulate, buy at the bottom of the range which eventually creates a floor in the price.”
However, the process can take a while as we saw in the previous bear market from February 2015 until May 2016 when BTC traded in the range of $200-$400.
Authors of the report Tuur Demeester and Michiel Lescrauwaet says as the coins available for selling run out, it gives rise to a pattern of “higher lows” that gives confidence even to the retail public to start buying again. This “wall of worry” is what they expect during the next bull market of Bitcoin.
Volatility Lows Suggest Bottom Proximity
While high bitcoin volatility reflects on the involvement of retail speculators, low volatility coincides with consolidation and accumulation.
“Recently, the Bitcoin 60 Day Volatility dropped below 5%, a level not seen since late 2016. In November last year, the volatility even dropped below 2%, the lowest in over 6 years.”
This the report states means the current market has lost most of its retail involvement and is now dominated by long-term value investors and agnostic traders.
Bitcoin: Most Favorable Of Any Liquid Investment In The World
The report concludes that Bitcoin is in the last stage of the bear market that is the accumulation phase but will trade in the $3k to $6,500 range before foreseeing the emergence of a new bull market. Though the lower prices are “still possible,” it states that the fundamentals of Bitcoin are gaining momentum while being embraced by millennials and the ecosystem developing at a fast pace.
The authors further assert that on the basis of long-term risk-reward ratio, Bitcoin is currently the “most favorable of any liquid investment in the world.” In the next five years, they believe it is set for mass market adoption that means,
“Bitcoin will become widely recognized as a portfolio hedging instrument and reserve asset, and will begin making significant inroads as a payment network.”