In the ever-evolving landscape of cryptocurrency, Bitcoin remains a focal point of discussion. A recent report by Fidelity Digital Assets has raised intriguing questions about Bitcoin’s price trajectory, particularly whether we are witnessing the conclusion of its cyclical “blow-off top” or if BTC is gearing up for another “acceleration phase.”
According to Fidelity analyst Zack Wainwright, Bitcoin’s acceleration phases are typically marked by high volatility and significant profit opportunities, reminiscent of its dramatic surge above $20,000 in December 2020. Despite 2023 reflecting an 11.44% loss year-to-date, and BTC being down nearly 25% from its all-time high, Wainwright suggests that the recent post-acceleration phase performance aligns with historical average drawdowns observed in prior market cycles.
Bitcoin historical downside after acceleration phases. Source: Fidelity Digital Assets Research
As of March 3, Wainwright indicated that Bitcoin is still in the midst of an acceleration phase but nearing its cycle’s conclusion, given that this date marked day 232 of this phase. Historical trends show that previous peaks occurred slightly later, with peaks in earlier cycles occurring on days 244, 261, and 280, respectively.
“The acceleration phase of 2010-2011, 2015, and 2017 reached their tops on day 244, 261, 280, respectively, suggesting a slightly more drawn-out phase each cycle.”
Is Another Parabolic Rally on the Cards for Bitcoin?
Despite remaining below the $100,000 threshold since February 21, a lot of the momentum that characterized earlier trading has diminished. Factors such as tariff-induced volatility and fears of an impending U.S. recession weigh heavily on market sentiment. However, large institutional entities continue to accumulate Bitcoin, displaying a bullish outlook.
For instance, on March 31, Strategy CEO Michael Saylor disclosed the acquisition of 22,048 BTC for approximately $1.92 billion at an average price of $86,969 per Bitcoin. Concurrently, Bitcoin miner MARA announced its plans to raise up to $2 billion in stock to further enhance its Bitcoin holdings. Additionally, companies like Japanese firm Metaplanet issued bonds totaling 2 billion yen ($13.3 million) for the purpose of purchasing more Bitcoin. GameStop also recently announced its intention to invest a portion of its financing in Bitcoin through a $1.3 billion convertible notes offering.
This ongoing accumulation of Bitcoin among institutions, despite fluctuating prices, underscores a long-term positive sentiment regarding Bitcoin as a reserve asset. Wainwright believes that while it’s challenging to gauge the immediate effect of these institutional purchases on BTC prices, it’s essential to monitor the frequency at which Bitcoin hits new all-time highs over rolling 60-day periods.
“Bitcoin has typically experienced two major surges within previous Acceleration Phases, with the first instance of this cycle’s following the election. If a new all-time high is on the horizon, it will have a starting base near $110,000.”
Bitcoin’s number of all-time high days (rolling 60 days). Source: Fidelity Digital Assets Research
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
