A recent Fidelity Digital Assets Report questioned whether Bitcoin prices are already seeing its cyclical “blow” or whether BTC (BTC) is in another “acceleration stage” cusp.
According to Fidelity analyst Zack Wainwright, Bitcoin’s acceleration phase features “high volatility and high profits,” similar to the price action seen when BTC exceeds $20,000 in December 2020.
Bitcoin’s return from the start of the year reflects a loss of 11.44%, with assets falling nearly 25% from an all-time high, but Wainwright says that the phase performance after recent acceleration is in line with the average drawdown of BTC when compared to previous market cycles.
The historical shortcomings of Bitcoin after the acceleration phase. Source: Fidelity Digital Assets Research
Wainwright suggests that Bitcoin is still in the acceleration phase, but is approaching completion of the cycle, as March 3 represents the 232nd day of the period. The previous peak lasted slightly longer before a correction period was established.
“The acceleration phases of 2010-2011, 2015 and 2017 reached the top on days 244, 261 and 280 respectively, suggesting a stage in which each cycle was slightly drawn out.”
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Bitcoin’s price has fallen below $100,000 since February 21, dissipating a significant portion of the momentum and positive sentiment that made up the “Trump Trade” and replaced by tariff war-inducing volatility and market fears that the US is heading for a recession.
Despite these overhangs and the negative impact they have had on daily Bitcoin prices, large entities continue to be added to BTC stockpiles.
On March 31st, Strategic CEO Michael Saylor announced that the company had acquired 22,048 BTC ($1.92 billion) with an average price of $86,969 per Bitcoin. On the same day, Bitcoin Minor Mara revealed plans to sell up to $2 billion in stock to get “sometimes” more BTC.
Following in the footsteps of large companies, Japanese company Metaplanet issued 2 billion yen ($13.3 million) on March 31, and bought more Bitcoin, with the biggest news in March coming from GameStop with the release of a $1.3 billion convertible note.
Recent purchases and statements purchasing from various international and US-based publicly listed companies demonstrate a price-independent approach to accumulating BTC as a reserve asset, highlighting the positive future price exceptions held among institutional investors.
While it is difficult to determine the impact of institutional Bitcoin purchases on BTC prices, Wainwright said that the metric during the 60-day rolling period when cryptocurrencies were the highest hit ever. Wainwright said in posting the following chart.
“Bitcoin usually experienced two major surges in its previous stage of acceleration. The first example of this cycle is after the election. If the new history high is on the horizon, the starting base would be nearly $110,000.”
The highest number of days ever (60 days rolling) for Bitcoin. Source: Fidelity Digital Assets Research
This article does not include investment advice or recommendations. All investment and trading movements include risk and readers must do their own research when making decisions.
