The best time to accumulate is when prices are low. Even though Bitcoin has had a huge rally this week the digital asset is still 75% down from its all-time high. Looking at previous accumulation periods may offer some insight into the current market situation.
200 Days of Accumulation
Last time Bitcoin went through a major boom bust cycle was in 2014 and 2015 when it dropped by a similar amount and most of the mainstream media and naysayers wrote the asset off. BTC fell from $1,130 to around $200 and the chart pattern virtually mirrored what happened in 2018.
During that bear cycle the accumulation period was around 216 days from January to August 2015. Only after this did Bitcoin begin to climb again throughout 2016 and 2017 recording an epic 9900% gain to its all-time peak in December.
Looking at current charts indicates that we could be half way through this accumulation phase, market by this week’s big green candle. If the pattern repeats itself charts will remain sideways until July when things really start to ramp up again.
$BTC Accumulation Pattern
It took Bitcoin 216 days for accumulation from bottom to spring in 2015
If this were accumulation, this week’s $1000 candle would be the exact middle of 216 accumulation days and would end on July 19th, 2019
Pure speculation but fun to compare pic.twitter.com/I6YfHiqwdW
— Josh Rager ? (@Josh_Rager) April 5, 2019
Buying Bitcoin at $5,000 does not sound as good as $3,600 but with a greater chance of increasing than dumping further it becomes a more attractive investment, at least in the short term. Most investors will not catch the absolute bottom for Bitcoin which may well have been on December 15 when it dumped to $3,200.
More Bullish Momentum Above 200 MA
Fundstrat’s Thomas Lee pointed out that there will be more bullish momentum since Bitcoin has crossed above the 200 day moving average for the first time since March 2018. Many analysts would consider this a sign of trend reversal and this week’s rally could have served as the end of crypto winter.
1/ CRYPTO
Definitely a positive development that #Bitcoin is now above its 200D mov. avg.
–Many consider P>200D as sign of $BTC in positive trend
–BTC acts significantly better P>200D, a win-ratio of 80% vs 36% when P<200Dsource: data scientists @fundstrat_ken @AlexKernA pic.twitter.com/Ru19HLlE4G
— Thomas Lee (@fundstrat) April 2, 2019
Another interesting statistic is that Bitcoin generally generates all of its performance within just ten days of each year and April second was one of them. Most experienced traders will agree that trying to time the market is pretty futile, especially with crypto which is still clearly extremely volatile.
The crypto bull made another one of his famous predictions this week when he appeared on CNBC and stated that the fair price for Bitcoin at the moment is $14,000. The figure was derived from multiplying the cost of mining by three.
Three days after the big pump Bitcoin is holding on to its gains and forming new support and resistance levels. It peaked at $5,300 but has consolidated just above $5,000 over the past 24 hours or so. At the time of writing BTC was trading marginally down on the day at $4,950. Many industry analysts are still confident that BTC could move all the way back up to $6,000 in the next few weeks however.
Image from Shutterstock