James Check Expects Major Liquidation in Bitcoin Companies

James Check evaluated the decline in the Bitcoin market and investor behaviors. He noted that bear markets wear out investors and emphasized that Bitcoin experienced a price-driven capitulation phase in February, now undergoing a period that tests the patience of less experienced investors. Despite a nearly 50% drop from its peak, he described the current period as the shallowest bear market. Although on-chain loss rates and capitulation indicators show similarities to previous cycles, he stated that the price decline remains behind those of 2015, 2018, and 2022. While there have been significant outflows from spot Bitcoin ETFs, it is noteworthy that the price has not fallen despite Strategy's sale of Bitcoin. This situation indicates that natural spot demand is meeting the market's sales. The profile of short-term investors buying Bitcoin has changed over the past five months; this group, which buys in weak market conditions, may consist of highly confident investors. Check argued that around $53,000 could form a strong bottom. He advised investors to focus on regular purchases during periods when indicators have fallen into the lowest 10% to 15% of historical distributions, rather than trying to find the exact bottom. Additionally, he predicted that companies copying Bitcoin accumulation strategies may not succeed in the long run.

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