The Bitcoin market may be bottoming out and hoarding, indicating an increase in coin outflows. According to @StockmoneyL, BTC is in a 6-month buy phase, the period of least risk and best opportunity for future rises.
A peculiar asymmetry characterizes the cycles in financial markets, particularly those in the crypto market. A short-lived parabolic rise in the price is usually due to a bullish market ending with extreme euphoria. If the rallies occur fast, there are more chances of bursting the speculative bubble.
Contrarily, it takes a bearish market longer to end, as the formation of a bottom is slow, and psychological fear and despair may persist. The bears constantly attempt to buy the absolute bottom and enter at the best time possible, usually ending in further losses and pain.
One element is common to both components of the complete market cycle: it is only possible to determine absolute peaks and troughs in hindsight. They are never obvious when they form, as most investors at the extremes only see further rises or drops.
Investors Predict that the Price of Bitcoin Will Drop Further
Cryptocurrency analyst @intocryptoverse recently surveyed many people about what would happen to Bitcoin (BTC) in Q4. According to their answers, most of the 11,299 respondents stated that they expected further drops in its price.
However, many more technical and on-chain indicators show that the price has bottomed out or is about to do it. Besides, some robust arguments and indicators still suggest this bearish market has not reached the absolute bottom yet.
Meanwhile, another cryptocurrency analyst, @rektcapital, wrote about the length of historical bearish markets. He estimated that the period during which Bitcoin has steadily depreciated in this cycle is similar to previous cycles.
The 3-month logarithmic chart confirms the observations of the above analyst, as the bearish market has persisted after the all-time of BTC. In addition, it reached an absolute minimum about a year after the peak, at the end of the fourth and first quarters.
The Outflow of Bitcoin from Exchanges like Coinbase to Increase
Many signs related to activities on cryptocurrency exchanges indicate that the Bitcoin market is bottoming out and hoarding. According to recent data, an increase in BTC outflows is taking place while the price of Bitcoin has reached a crucial support level.
According to a chart released by @IIICapital, the trading volume of Bitcoin on Coinbase has dropped steadily since the bullish market started in Q4 2020. The reversal of the trend of BTC and its drops in 2022 did not stop the outflow of coins.
Meanwhile, a chart posted by @ki_young_ju supports an end to the bearish market. According to the so-called Outflow OWAP (On-chain Weighted Average Price), the price of BTC is in a long-term support area.
Current Bitcoin Cycle Dynamics Are Similar to the 2019 Bullish market
Fractal similarities between the price action and the 2018-2019 bullish market also allow determining the phase of the current bearish market. @StockmoneyL provided an interesting analysis of this, finding parallels in the dynamics of the last three cycles.
According to the analyst, Bitcoin is in a buy phase of about six months. That has proven to be the period of least risk and best opportunity for future increases in the price. The bullish prediction from this analysis indicates that USD 19,000 will hold as a support level while the bottom has already come.
By Alexander Salazar
