Accumulation in the Bitcoin market has been a frequent topic of discussion within the crypto community lately. The re-accumulation range widened as coins switched from weak to strong hands, speculative traders sold their stocks, and whales entered the market.
Many analysts interpreted this as a positive sign of the possibility that Bitcoin could resume its bull run soon. This was due to the speculation that after this phase a supply shock might be appropriate, which will allow the Bitcoin price to rise as supply becomes scarcer.
Analyst Willy Woo is among the analysts who recently repeated this theory for Bitcoin. He mentioned in a recent podcast that the next step for the market would be to end this re-accumulation period so the bull run could resume. He said,
“As the price slips down, I think the next big event is when the fundamentals stifle the price move and we break out of this accumulation band in the middle of a bull market … this bull market is structured like I’ve never seen it before. “
There could be several reasons for him to claim so. First, during the crypto summer of 2017 when the price had seen an astronomical spike, a short squeeze was expected and the market appeared ready to rise if the coin broke resistance. However, although a short squeeze is expected soon as the market is currently selling short, a turbulent price move otherwise characteristic of such a scenario was unexpected.
This was due to underlying factors, in particular low open interest, i.e. the number of unsettled derivatives contracts. By the beginning of the year, many traders had made bullish bets that sparked a boom in the options market. However, this subsided as price began to consolidate and sell-offs began to dominate.
Aggregate open interest had hit a record high of over $ 26 billion during the peak of the bull run in mid-April. It has fallen dramatically since then, trading at $ 11.78 at the time of writing, a decrease of nearly 59%.
However, the analyst stated that once all of the downward trends from outside factors like the energy debate, China’s crackdown, and the hash rate decline, positive factors may begin to outshine. State fund accumulation was one of them.
El Salvador bought millions of dollars’ worth of bitcoins from miners, and other countries should follow suit. This move resulted in higher institutional acceptance of Bitcoin than last year. No wonder, then, that this was dubbed Bitcoin’s final cycle by the analyst, as there was a strong possibility of a reversal once these factors took their full form. He said,
“Bitcoin doesn’t see this very strong four-year cycle and we tend to do a random walk and it’s strongly correlated with macro and we just go up to a million dollars in a few years.”
While a million dollar top felt far-fetched at first, Woo mentioned that the “monetary base of civilization is being reinvented,” and that Bitcoin might as well be topless. Comparing Bitcoin’s journey to the Agricultural and Industrial Revolution, he said that it was a once in a millennium event and that once it became the currency of choice for the world, there would be no going back. He added:
“I think the top is about one to one to world GDP in market capitalization, that’s a hundred trillion? This could be a quadrillion if more money is printed. “