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A new report from Adamant Capital concludes that the bear market of Bitcoin may soon be over, as the currency enters a buildup phase before the next big bullish event.
Compared to the crypto of the winter of 2018, during which investors were forced to dispose of the BTC or suffer losses as the currency went from $ 20,000 to $ 3,000, the current market has much more optimism about the price outlook. Investors are now accumulating bitcoins, exerting pressure on bears that could sell just before another major price hike.
Tuur Demeester and Michiel Lescrauwaet, co-authors of the report, said the current price of Bitcoin should appeal to investors,
"Now, at 75% below its peak of 2017, we believe the current bear market represents an exceptional opportunity for value investors."
In what Adamant Capital calls the "accumulation phase" of Bitcoin, the badytics company expects BTC to negotiate between $ 3,000 and $ 6,500, the bears unloading their coins on coins. consenting bulls seeking a reduced price for the number. a cryptocurrency by market capitalization.
The report also concluded that retail investors had taken a bath in November 2018, surrendering any gains already made – or subjecting themselves to significant losses – to a capitulation event that had seen the price of Bitcoin fall from 48%. Part of the fall in cryptocurrency prices can be attributed to market uncertainty due to the Bitcoin Cash hash war, but investors have also been tired by nearly 12 months of bearish prices. The end result is an overabundance of investors seeking to return to the market under favorable conditions, especially if they sold at the lowest relative Bitcoin price last November.
Adamant Capital has made a point of tracking unrealized gains and losses and being an indicator of market performance, and indicates that the most recent price increase has had a significant impact on this indicator,
"The recent price rally, which went from $ 4,000 to over $ 5,000, significantly improved HODLer's unrealized profit and loss account, improving the value of our reported sentiment of capitulation in the hope. "
The report, in particular, examines the badertion that retail investors (individual investors as opposed to professional traders or institutions) have largely left the market after the last year of losses. Such a situation would indicate that the well of bearish sellers of Bitcoin could be smaller than expected. Adamant Capital highlights data from Google Trends indicating "apathy and disinterest" on the part of small investors, as Bitcoin's research has fallen to a level as low as March 2017.
Adamant also highlights the gradual decline in Bitcoin price volatility in recent months, a factor that has always been attributed to the actions of retail investors,
"High volatility of Bitcoins may be an indirect indicator of the involvement of retail speculators, while low volatility tends to coincide with phases of consolidation, apathy and accumulation."
With the disappearance of the tough retail investors, the long-term holders make up the majority of the market, a group that will seek to accumulate more BTC at current prices and to avoid succumbing to bearish sellers.
The combination of price anticipation and investor composition led Adamant to conclude that Bitcoin, at its current price level, is back in an "undervalued territory".
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