“Probable Evidence” Bitcoin Has Capitulated In The Last 2 Months – Analysis
Bitcoin (BTC) is giving overwhelming evidence that it’s capitulating, and it’s time to turn bullish as a result, new analysis believes.
In a Twitter thread On August 3, Charles Edwards, CEO of crypto-asset manager Capriole, revealed what he called “The 12 Bitcoin Capitulations.”
“Risk return skewed positive” for Bitcoin
With BTC price action recovering from multi-year lows but still hovering near key bear market support, opinions vary widely on what will happen next.
Some are calling for a return to levels even lower than June’s low of $17,600, while others argue that a “bear market relief rally” could take BTC/USD as high as $40,000 first.
For Edwards, the raw evidence suggests that the past few months have been bearish enough, and that behind the scenes, Bitcoin has quietly capitulated.
“The raw number of evidence for major Bitcoin capitulation today is insane,” he wrote of his 12 key examples.
“Each event alone is a rare event and increases the likelihood that future risk returns are positively skewed.”
In addition to popular chain signals previously covered by Cointelegraph, including MVRV and NUPL, Edwards’ evidence includes macro triggers, such as poor US stocks and stagnant M2 money supply growth.
“We’ve just seen the _worst_ inflation-adjusted declines in traditional markets in 8 generations. Enough said,” he continued, noting that the S&P 500 had delivered its worst return in real terms since 1872.
However, the icing on the cake of the 2022 Bitcoin bear market is the speed with which industry players have capitulated.
For Edwards, bankruptcy events in Celsius, Voyager and others, combined with Tesla selling the majority of its BTC holdings at a loss, are the “ultimate sign of capitulation.”
“Take a look at the level of institutional capitulation here,” he commented.
“Leverage is one of the best indicators of relative overvaluation and undervaluation in Bitcoin, and many large leveraged crypto institutions have been wiped out.”
According to separate data from monitoring resource Bitcoin Treasuries, Tesla remains the public company with the second-largest BTC reserves, but is now far behind leader MicroStrategy and its 129,698-BTC stack.
“Large Accumulation Zone” returns
As Cointelegraph recently noted, capitulation has also been evident among Bitcoin miners since the decline to the lowest prices since late 2020.
Related: Historically Accurate Bitcoin Metrics Exit Buy Zone in ‘Unprecedented’ 2022 Bear Market
After initially selling their BTC holdings, however, miners have staged a dramatic rally, new data suggests, in yet another sign that the worst of the capitulation may already be over.
Beyond miners, the amount of BTC supply being transferred at a lower price than what was paid for it has hit levels that Edwards said are indicative of accumulation.
“The percentage of total supply transferred at a loss reached 1.9% last month,” he wrote alongside a chart from research firm Glassnode in the chain.
“Historically, when this metric exceeds 1.5%, it shows that a large portion of the market is hurting. Most were also large accumulation zones.”
The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trade involves risk, you should do your own research when making a decision.
