Recent analysis suggests that Bitcoin (BTC) might currently be in a reaccumulation phase. The current outlook resembles a pattern known as the Wyckoff pattern. This pattern is commonly used to identify different stages in market cycles.
Is $BTC in Reaccumulation? Wyckoff and On-Chain Analysis“If the reaccumulation phase continues, we could expect a breakout upwards (markup phase) as the next step in the Wyckoff cycle.” – By @onchain_edge Read more 👇https://t.co/rgU11Ef4Iv pic.twitter.com/GjOMICVENG
— CryptoQuant.com (@cryptoquant_com) July 2, 2024
Bitcoin Price Range Indicates Reaccumulation Phase in the Market
CryptoQuant and other market analysts on the chart suggest that there is a consolidation phase for the Bitcoin price. It has been trading within a range of approximately $57,178 and $71,587. Sideways movement like this is common during reaccumulation phases, when the market consolidates and could potentially move up.
Other promising signs like the MVRV Ratio are currently at 1.97. This ratio shows that the market value exceeds the realized price, which can mean that Bitcoin is more overvalued now. It is generally associated with a period where investors have large unrealized gains, typical of a distribution or early markdown phase before accumulation.
The Exchange Inflow & Outflow trends analysis also exposed a decline in volumes, especially in the Exchange reserves. This implies that Bitcoin is being pulled out from the exchanges and this is normally expected in the accumulation phase. It suggests increasing optimism among the owners who have no intention to sell their Bitcoin.
SOPR Ratio Suggests Long-Term Holders Favoring Accumulation
The aSOPR, which estimates the ratio between profit taking and loss is slightly above 1. This indicates a period when no party is controlling the market, and this is typical of reaccumulation phase.
However, the SOPR Ratio has remained low. This ration measures the coin exchange activities between long-term and short-term investors. This suggests that the long-term investors are not inclined to realize their gains, which bodes well for the possible bottoming patterns that accompany accumulation or reaccumulation phases.
In conclusion, if Bitcoin will keep repeating this pattern, market participants and analysts are expecting a bullish breakout in the market. This would initiate a markup phase in the Wyckoff cycle that might be followed by a bullish trend. As result of this, it will increase in the price of the asset. Moreover, these aspects are closely watched by investors and analysts in an attempt to identify the next moves of Bitcoin in the given market cycle.
