The Bitcoin price has been trading sideways for a few weeks now, bringing the notorious volatility of the asset to a standstill. This type of price action often indicates an accumulation, which typically takes place at lower prices.
Additional data that reflects the BTC balance of the crypto exchange also suggests that accumulation is taking place while Bitcoin is trading just under $ 10,000. If this is really an accumulation phase, what happens to the first cryptocurrency?
Is the next cryptocurrency bull market coming up?
The market-leading cryptocurrency appears to be at a dead end. The asset has been halved for a long time, but there is no new bull market here, as many have claimed.
The longer it takes for the cryptocurrency to rise, the more naysayers come out of the wood to beat up valuation models such as stock-to-flow and others.
Bitcoin price predictions range from zero to over $ 1 million per BTC. The extremely scarce digital asset could one day replace all of the world's fiat money or go completely out of hand. Intermediate scenarios are little space.
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The asset was in a long-term uptrend and a secular bull market with few downtrends in between. The cryptocurrency is now in the critical moment when either a new bull market will start or a deeper fall into the depths of the ongoing bear market could come next.
Bitcoin has so far failed to break above $ 10,000 and remains so today. However, the main difference between now and then is that the data suggest that this last visit at $ 10,000 is an accumulation phase and not a distribution.
Bitcoin accumulation phase data signals despite prices close to $ 10,000
According to Wyckoff theoryThe markets go through four different phases: accumulation, premium, distribution and discount. Investors accumulate large stocks of assets at lows, then prices rise during the premium phase. At this point, early investors begin to distribute their wealth, take profits, and initiate a write-off phase. The cycle then repeats again.
Due to Bitcoin's hard-coded digital scarcity, the point in time at which the asset is accumulated can differ drastically from other assets.
Bitcoin was accumulating at full strength when the asset dropped to $ 3,200 in December 2018. Then prices were raised and spread throughout the second half of 2019.
The distribution also occurred every time the bitcoin price reached $ 10,000 or more. But now the key price level could be where the accumulation unfolds.
We are in #BTC Accumulation phase.
The moving average gap of 30 and 90 days of all reserves of all exchanges represents the downside risk. It reached a record low in May this year and is still below zero. pic.twitter.com/IsljYG6h0Z
– Ki Young Ju (@ki_young_ju) July 13, 2020
New data The chart of the 30-day and 90-day moving average "gap in all stock market reserves" BTC shows that the collapse on Black Thursday has brought Bitcoin reserves to a record low. Historically, reaching such lows has been a strong buy signal.
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Another downsizing shows that Bitcoin rallied shortly after each time the BTC's moving average supply of foreign exchange reserves was reached.
The metrics indicate that Bitcoin is fully accumulating, similar to when the asset fell to its $ 3,200 bear market low. This low could have been the point of maximum financial return during this bear and bull cycle.
The next stop could be a new record in BTCUSD before the entire cycle repeats itself.