Has the Bear Market Arrived? Analysts say three reasons why bitcoin may still be in a bull market
Long-term net bitcoin holder positions show that investors actually started to re-increase their holdings back in late April.
On June 22, Bitcoin saw a plunge below $29,000, rocking the market to the point where a few analysts thought it could fall below $20,000.
Many traders on crypto Twitter were focused on the formation of a death cross on bitcoin’s chart as a harbinger of a possible price drop again, but analysts with the opposite view saw the chart pattern as a signal that it was time to act.
Three reasons why some traders still believe bitcoin is a bull market include the emergence of the “spring” phase of the Wyckoff accumulation model, a steady increase in holdings by long-term holders, and the formation of a “bear market trap” at the golden mean. trap”, similar to the previous bull market run.
The Witkoff Accumulation Model indicates that “spring” has arrived
The Wyckoff Accumulation Model has been all the rage among cryptocurrency analysts over the past month, as bitcoin’s price action has been following the model relatively closely since the May 19 sell-off.
As shown in the chart above, Bitcoin fell below $29,000 and then rallied to over $32,000. Some analysts believe that the “spring test” in phase C of the Wyckoff model has materialized. This suggests that the current correction has bottomed out and will now begin a choppy, upward climb.
If this proves to be true, BTC will enter Phase D, also known as the “markup phase”, where a new uptrend is established and a “pullback to new support provides a buying opportunity”, which is often seen as a buy-on-dip opportunity.
During the D phase, as the cycle ends, it is expected to break out to new highs and prepare to restart after the uptrend is exhausted.
Long-term Holders Remain Bullish
Another bullish sign cited by analysts is the steady increase in holdings by long-term holders.
Long-term net bitcoin holder positions show that investors actually began to re-increase their holdings as early as late April and as the price fell to $30,000 to $40,000. By May, they began to significantly increase their activity. The on-chain data shows that these investors continued to continue buying during the recent dip.
This activity suggests that more experienced cryptocurrency traders are familiar with Bitcoin’s market cycle and believe the current range is a good level to establish long positions when fears are high and sentiment is low.
Those who risk buying assets when prices and sentiment plummet may reap the greatest rewards, and these are the reasons why contrarian traders are thriving.
A bear trap lurks at gold ratios
A third scenario of concern to some analysts suggests that the current price action has set up a bear trap, echoing the action seen in the previous cycle, namely a pullback to the extended Golden Ratio level of 1.618, which would then break out to new highs.
From this perspective, the market is currently in the perception phase of the four psychological stages of an asset bubble. After the bear trap occurs, Bitcoin will enter the mania phase, where widespread media coverage will attract the attention of new market participants who will then chase the price to ever-increasing heights “based on the illusion that the asset will continue to rise forever.
Previously, veteran trader Peter Brandt predicted that bitcoin could reach a price of $200,000 in the third or fourth quarter of 2021, and he is far from alone in predicting that bitcoin’s value will surpass the $100,000 mark this year, suggesting that the long-expected top has not yet arrived.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/has-the-bear-market-arrived-analysts-say-three-reasons-why-bitcoin-may-still-be-in-a-bull-market/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.