A recent report from a notable digital assets firm raised questions about whether Bitcoin has already reached its cyclical “blow off top” or if it is poised to enter another “acceleration phase.”
According to analyst Zack Wainwright, acceleration phases for Bitcoin are marked by “high volatility and high profit,” reminiscent of the price activity when BTC surged past $20,000 in December 2020.
Currently, Bitcoin’s year-to-date return shows an 11.44% loss, and it is nearly 25% down from its all-time high. However, Wainwright points out that the recent performance following this acceleration phase aligns with BTC’s average drawdowns observed in previous market cycles.
Wainwright believes that Bitcoin remains in an acceleration phase but is getting closer to completing its current cycle, noting that March 3 marked day 232 of this phase. Historical peaks have typically lasted a bit longer before entering a corrective period.
“The acceleration phases of 2010-2011, 2015, and 2017 peaked on day 244, 261, and 280 respectively, indicating a tendency for longer phases each cycle.”
### Is Another Parabolic Rally in Store for Bitcoin?
Since February 21, Bitcoin has struggled to stay above $100,000. Much of the momentum and favorable sentiment that characterized the “Trump trade” has waned, replaced by volatility stemming from tariff wars and concerns that the U.S. might be heading towards a recession.
Despite these challenges and their adverse effects on Bitcoin’s daily prices, significant players in the market continue to expand their BTC holdings.
On March 31, the CEO of a prominent strategy firm announced the acquisition of 22,048 BTC for $1.92 billion, averaging $86,969 per Bitcoin. That same day, a Bitcoin mining company revealed plans to sell up to $2 billion in stock to acquire additional BTC periodically.
Similarly, the Japanese company Metaplanet issued 2 billion yen ($13.3 million) in bonds on March 31 to buy more Bitcoin. Meanwhile, GameStop made headlines with a $1.3 billion convertible notes offering, part of which could be allocated for Bitcoin purchases.
These recent purchasing moves and intentions from various public companies, both internationally and in the U.S., indicate a price-agnostic approach to accumulating BTC as a reserve asset, reflecting a positive outlook on future prices among institutional investors.
While assessing the direct impact of institutional Bitcoin purchases on its price is challenging, Wainwright suggests monitoring the number of new all-time highs reached within a rolling 60-day window. He presented a chart and remarked,
“Bitcoin has typically experienced two significant surges during prior acceleration phases, with the first occurrence of this cycle following the election. If a new all-time high is imminent, it is likely to start near $110,000.”
This article does not provide investment advice or recommendations. All investment and trading activities involve risk, and readers are encouraged to perform their own research before making decisions.