Fidelity Report Suggests Bitcoin May Be Entering Another Acceleration Phase
A Fidelity report examines whether Bitcoin is entering another acceleration phase despite its recent losses. Analyst Zack Wainwright notes that institutional investments and Bitcoin’s historical performance trend indicate bullish sentiments for future price movements. Significant purchases by firms like MicroStrategy and GameStop reflect confidence in Bitcoin as a reserve asset, potentially paving the way for upcoming price surges.
A recent report from Fidelity Digital Assets raises the question of whether Bitcoin has reached its cyclical “blow off top” or is entering another “acceleration phase.” Analyst Zack Wainwright characterizes these phases by their “high volatility and high profit,” recalling the significant price surges witnessed when Bitcoin surpassed $20,000 in December 2020.
Despite a year-to-date loss of 11.44% and a near 25% decrease from its all-time high, Wainwright notes that Bitcoin’s post-acceleration phase performance aligns with historical drawdown averages compared to earlier market cycles. He suggests that while Bitcoin is still in an acceleration phase, it is nearing cycle completion, given that March 3 marked day 232 of this phase. Previous cycles peaked later, with durations stretching from 244 to 280 days.
Bitcoin has struggled below the $100,000 threshold since February 21, as market dynamics have shifted away from the earlier enthusiasm and toward recession fears influenced by tariff volatility. Nonetheless, significant players continue to accumulate Bitcoin. On March 31, MicroStrategy’s CEO Michael Saylor announced the acquisition of 22,048 BTC for $1.92 billion, while MARA planned a $2 billion stock sale for further BTC purchases.
The bullish sentiment extends to other entities, with Metaplanet issuing bonds to finance Bitcoin acquisitions, and GameStop poised to use a portion of its $1.3 billion in convertible notes for Bitcoin investments. Such broad institutional buying activity suggests a growing confidence in Bitcoin as a reserve asset, irrespective of its current price.
Measuring the influence of institutional purchases on Bitcoin’s price remains complex. However, Wainwright indicates that monitoring the frequency of new all-time highs during specific rolling periods may provide insights. He noted that Bitcoin has typically demonstrated two significant surges during acceleration phases, with potential future peaks beginning near $110,000.
In conclusion, Fidelity’s recent analysis highlights the ongoing complexities surrounding Bitcoin’s market performance, particularly its current acceleration phase. Despite recent price challenges, the sustained interest from institutional investors reinforces a belief in Bitcoin’s long-term potential. As significant purchases continue amidst market uncertainties, the cryptocurrency may still be poised for future price rallies, indicating robust underlying confidence in its value as a digital asset.
Original Source: cointelegraph.com
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