A recent report by Fidelity Digital Assets has raised questions about whether Bitcoin has already experienced its cyclical “blow off top,” or if BTC (BTC) is nearing another “acceleration phase.”
Fidelity analyst Zack Wainwright notes that Bitcoin’s acceleration phases are marked by “high volatility and high profit,” similar to the price activity observed when BTC surged past $20,000 in December 2020.
Although Bitcoin has recorded an 11.44% loss year-to-date and is down nearly 25% from its all-time high, Wainwright argues that the recent post-acceleration phase performance aligns with BTC’s historical average drawdowns when considering prior market cycles.
Wainwright posits that Bitcoin is still in the midst of an acceleration phase but is approaching the end of the cycle, with March 3 marking day 232 of this phase. Historically, previous peaks have lasted a bit longer before transitions into corrective periods commenced.
“The acceleration phases of 2010 – 2011, 2015, and 2017 peaked on days 244, 261, and 280, respectively, indicating a slightly prolonged phase in each cycle.”
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Bitcoin has struggled to surpass $100,000 since February 21, with much of the momentum from the “Trump trade” dissipated, giving way to tariff-war-related volatility and concerns that the US may be heading into a recession.
In spite of these prevailing factors and their adverse effects on daily Bitcoin prices, large investors continue to stack up BTC.
On March 31, Strategy CEO Michael Saylor declared that the company had purchased 22,048 BTC (valued at $1.92 billion) at an average price of $86,969 per Bitcoin. On the same day, Bitcoin miner MARA announced plans to sell up to $2 billion in stock to acquire more BTC “from time to time.”
Following the lead of larger-cap companies, Japanese firm Metaplanet issued 2 billion yen ($13.3 million) in bonds on March 31 to buy more Bitcoin, and the most notable announcement of March came from GameStop, which revealed a $1.3 billion convertible notes offering, part of which could be allocated towards purchasing Bitcoin.
The recent purchases and intentions to buy from a range of global and US-listed firms indicate a price-agnostic strategy toward accumulating BTC as a reserve asset, reflecting optimism about future price expectations among institutional investors.
While assessing the impact of institutional investor Bitcoin acquisitions on BTC prices remains challenging, Wainwright mentions that a key metric to observe is the number of days in a rolling 60-day period during which the cryptocurrency reaches a new all-time high. Wainwright presented the following chart and remarked,
“Bitcoin has generally witnessed two major surges within past Acceleration Phases, with the first instance in this cycle occurring post-election. If a new all-time high is on the horizon, it will likely commence with a base around $110,000.”
This article is not intended to provide investment advice or recommendations. Every investment and trading decision carries risks, and readers are encouraged to conduct their own research before making any financial decisions.
