A new report from Adamant Capital titled “Bitcoin in Heavy Accumulation” suggests that now is a good time to buy Bitcoin (BTC) before the next bull market begins. This report has been cycling through the cryptosphere generating a lot of interest, and was even covered by Forbes.
Adamant Capital’s report is not to be taken lightly, as it is packed with insightful data compiled and interpreted by some of the most prominent analysts in the crypto space, co-authored by Tuur Demeester and Michiel Lescrauwaet.
Moreover, in the past, Adamant Capital published reports suggesting that Bitcoin was severely undervalued in both 2012 and 2015.
The timing of these reports was dead-on accurate, as it’s evident that Bitcoin was severely undervalued during these periods and experienced massive bull runs in the months and years following the publication of these reports.
Bitcoin Is in Accumulation, But at What Prices?
The report suggests that we already experienced capitulation in the Bitcoin market during November 2018, when retail investors and longtime Bitcoin hodlers fled the market after BTC broke $6,000 and dropped 48% in value.
After capitulation comes the accumulation phase, in which Adamant Capital expects Bitcoin to trade in a range between $3,000 and $6,500.
Per the report, the co-authors said:
“Now, at 75% below its 2017 all-time high, we believe the current bear market represents an exceptional opportunity for value investors.”
Retail Speculators Are Gone
A big part of why Adamant Capital believes we have experienced capitulation and are in the accumulation stage is because a variety of data points suggest that speculative retail investors have exited the market on multiple occasions.
The report cited data from Google Trends showing that key searches have dropped to levels that were only seen in March 2017, when the price was around $1,500.
Another indicator they used was the relatively low price volatility of Bitcoin, which suggests there is less involvement from retail investors.
The report explains:
“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.”
Longtime Hodlers are Finally Accumulating Bitcoin Again
One of the most telling factors that Bitcoin is in the heavy accumulation phase is that long-term investors who have previously acquired substantial amounts of Bitcoin over the years are finally adding to their positions again.
These Bitcoin hodlers are said to have the largest impact on the Bitcoin price, and their actions have been analyzed by Adamant Capital by tracking their movements via public blockchain data.
According to the report, long-time Bitcoin investors were last seen adding to their Bitcoin positions in the first 3 quarters of 2018 in hopes that the price would recover and not enter a prolonged bear market.
The report continues:
“That all changed in November 2018. As the price dipped below $6,000, holders panicked and sold off coins. From November 14 to 16, over 70,000 Bitcoin days were destroyed, which was the biggest move of old bitcoins since February 23 of that same year.”
Basically, what they mean by “Bitcoin days destroyed” is that a large number of Bitcoins that had been dormant for significant periods of time were finally moved and sold off, which contributed to the capitulation phase in November-December.
As seen in the chart below, the Bitcoin hodlers capitulated in November-December and are again accumulating Bitcoin right now.
Final Thoughts
Adamant Capital believes the market sentiment has improved since early 2019 and that the percent decline of -84% from the all-time high is on par with drawdowns from previous cycles (-92% in 2011 and -85% in 2014-15). Therefore, they believe the Bitcoin bottom is in, and that it is now time to accumulate.
However, the report did mention:
“While the markets could dip back down for a re-test of the November lows (or lower still) to further digest the hundredfold run-up of 2015-17, we feel strongly that Bitcoin is undervalued at these prices.”
Do you think the Bitcoin bottom is in and that it is now time to accumulate Bitcoin? Will Bitcoin retest the $4,000 to $3,200 range? Let us know what you think in the comment section below.
