Is $45,000 at stake for Bitcoin this year? Decoding BTC Accumulation Behavior
Bitcoin has risen 80% this year. After starting this week on a promising note, the world’s largest cryptocurrency regained its footing at $30,000, but the bears were quick to catch on and pushed the price below it recently.
While the rally may have stalled near this psychologically crucial threshold, its strong market performance so far is a stark contrast to 2022, essentially indicating that a favorable regime shift is underway.
More importantly, BTC whales continued to show an aggressive accumulation trend.
Accumulation
After a month long dumping, whale addresses with 100-1k BTC are back in the accumulation game. In accordance data from crypto analytics firm Santiment, this group of investors added more than 20,000 BTC to their bags in the past two days.
In addition to whales raking in Bitcoins, Glassnode has data suggests that another group of investors, known as “Shrimps”, with less than 1 BTC, have also “meaningfully” increased their chain balance.
The analysis said the shift in accumulation behavior was prominent after the catastrophic fall of Terra ecosystem tokens last year. After this event, retail participants accelerated their “absorption” of BTC and managed to increase their relative share of the circulating supply by 1.78%.
This accumulation trend will be crucial in helping Bitcoin sustain its rally for longer.
Sell in May and walk away?
So far, Bitcoin has outperformed traditional risk assets, such as the tech-heavy Nasdaq index, by a significant margin. The crypto asset could be poised for gains if the pattern continues.
Industry experts believe that Bitcoin is closely following the rally in early 2019, and prices could reach a peak of around $45,000 in May. In his last reportK33 Research said the drawdown and recovery cycle is remarkably similar to the pattern seen in the 2018-19 bear market in terms of length and trajectory.
While a 1:1 mirroring of the current drawdown to past drawdowns may not occur, the similarity to the 2018 drawdown is staggering, the analysis observed.
“While history is far from likely to repeat itself in a similar fashion should the fractal continue – BTC will peak around May 20 at $45,000.”
K33 senior analyst Vetle Lunde noted that Bitcoin’s rise so far this year has all the signs of a “hate bullish move”, which he explained to be “a rally where holders feel underexposed after a very traumatic year, where investors are risk-free in anticipation of further cons.” The hated 2019 rally ended with a “significant blowout top” before the flagship crypto resumed trading down 40-60% from its 2017 all-time high.
