Bitcoin Remains in Heavy Accumulation; What Does This Mean?

Despite gaining more than 40% this year, bitcoin (BTC) remains in a “heavy accumulation” phase, according to analysts at Adamant Capital. This view not only mirrors Hacked’s analysis from three months ago, it suggests that the path of least resistance is higher as investors look to cost-average the virtual currency at a favorable price.

Heavy Accumulation Phase

In a research report published April 18, Adamant Capital said long-term investors and bitcoin whales are loading up on the leading cryptocurrency and have been doing so for quite some time. During the accumulation phase, BTC is likely to trade between $3,000 and $6,500.

If we were to capture current market sentiment in one word, it would be hope, analyst Tuur Demeester wrote. An analysis of Bitcoin’s blockchain suggests that investors are holding again and are actually accumulating bigger positions.

“Bitcoin’s secular bull market is supported by strong fundamentals,” analyst Tuur Demeester said, once again mirroring Hacked’s previous analysis from two months ago.

For all the fear, uncertainty and doubt being spewed by mainstream media, bitcoin’s fundamental picture has improved considerably in the wake of the bear market. We present 11 bullet points in support of that view in the following article: Crypto Adoption is Spreading Like Wildfire; Where is Bitcoin Headed?

Short interest in bitcoin has also been in rapid decline. Since peaking in early December, BTC/USD shorts on Bitfinex have plummeted 45%.

More Chances to Buy

As we mentioned at the outset, the general sentiment in the crypto community has shifted from one of fear to one of steady accumulation. This means traders are looking to buy on the dips, especially near the $5,000 price floor. Bitcoin has defended this level successfully for the past three weeks.

Popular cryptocurrency trader Flood recently tweeted that he is a buyer from $5,150 to $4,900.

A similar view is held by Galaxy, which recently tweeted that the opportunity to buy bitcoin at depressed levels could materialize soon.

The $6,800 price level is critical for the bulls, as it negates the long-term bear market and brings us back to levels last seen in Q3 2018. Read more about this level: Has Bitcoin Bottomed? A Closer Look at the Bullish and Bearish Cases.

BTC/USD Price Update

The bitcoin price quickly rebounded on Monday after trading at slightly lower levels during the weekend. BTC peaked at $5,355.80 on Bitfinex. It was trading above $5,300 on most major exchanges.

Via the Bitfinex daily chart, bitcoin is currently trading the $5,325 price level. The relative strength index (RSI) and MACD indicators are both supportive of further moves north, although overbought resistance could be a factor.

According to Bitwise, real bitcoin trade volumes are about $270 million, roughly 95% lower than what’s reported on CoinMarketCap. Relative to bitcoin’s market cap, the cryptocurrency’s daily turnover is comparable to that of gold, whose market is valued at $7 trillion and has a spot volume of $37 billion.

Bitcoin’s current dominant trend is higher, as evidenced by back-to-back monthly gains. Based on previous trend cycles, the current uptrend could continue for the next two-to-three months before a major shakeout takes place. Read more: Bitcoin’s Next Four-Year Cycle Has Already Begun; Here’s What Investors Can Expect.

At current values, bitcoin has a total market capitalization of $94 billion, up more than $30 billion since the start of the year. Bitcoin’s dominance rate is currently hovering at 52.6% after peaking near 53% during the weekend.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Chief Editor to and Contributor to, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi