A new analysis believes that Bitcoin (BTC) is providing compelling evidence that it is giving up, and it is time to reverse the upside as a result.
In a Twitter thread on August 3, Charles Edwards, CEO of crypto asset manager Capriol, revealed what he called “the 12 Bitcoin franchises.”
“Return on Risk Positively Skewed” for Bitcoin
With BTC price action recovering from multi-year lows but still hovering near a major bear market support, opinions differ widely on what will happen next.
Some are calling for a return to even lower levels from the June low of $17,600, while others are arguing that a “bear market rally” could take BTC/USD to $40,000 first.
For Edwards, the initial evidence suggests that the past months have been bearish enough and that behind the scenes Bitcoin has been quietly giving in.
He wrote of 12 prime examples: “The raw number of evidence of major bitcoin capitulation today is insane.”
“Each event alone is a rare event and adds to the potential for future risk returns to skew positively.”
In addition to popular on-chain references previously covered by Cointelegraph, including MVRV and NUPL, Edwards’ evidence includes macro triggers, such as weak stock performance in the US and stagnant M2 money supply growth.
“We’ve just seen the _worst_-inflation-adjusted declines in traditional markets in the past eight generations. Enough,” he continued, noting that the S&P 500 had its worst returns in real terms since 1872.
The S&P 500 displays the annotated chart. Source: Charles Edwards / Twitter
However, the cherry on the pie in the 2022 Bitcoin Bear market is the rate at which players in the industry have given up.
For Edwards, the bankruptcy events of Celsius, Voyager and others, along 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 major leveraged crypto institutions have been eliminated.”
According to separate data from Bitcoin Treasury monitoring resources, Tesla remains the public company with the second largest BTC reserves but is now far behind the leading MicroStrategy and stacked 129,698-BTC.
Bitcoin holdings of public companies as of August 4 (screenshot). Source: Bitcoin Bonds
“Big accumulation area” is back
As Cointelegraph recently noted, the capitulation has also been evident among bitcoin miners since the drop to the lowest prices since late 2020.
Related: Historically Accurate Bitcoin Scale Exiting Buying Zone in an ‘Unprecedented’ 2022 Bear Market
After initially selling bitcoin stocks, however, miners made a dramatic turnaround, new data suggests, in another sign that the worst of the capitulation may already be over.
Away from miners, the amount of bitcoin that is being moved at a lower price than what was paid for has reached levels that Edwards said are indicative of accumulation.