Even though Bitcoin surged by nearly 10% between March 5 and 6, reaching as high as the $92,000 level, uncertainty still lingers around the flagship asset. BTC has fallen below the $90,000 mark for the third time this week, but on-chain data shows that the asset is at a critical region that hints at a possible bullish phase in the near future.
A New Accumulation Cycle For Bitcoin Looming?
As the market faces persistent heightened volatility, Bitcoin’s price is at a pivotal junction that hints at its next trajectory. Advanced investment and on-chain platform Alphractal outlined the development following its historical publication of the powerful Bitcoin Alpha Price metric.
After examining the Alpha Price metric, the platform highlighted that BTC had reached a critical region that must be closely monitored in the upcoming days. This region is crucial since it could trigger the start of a new accumulation phase, suggesting renewed interest from long-term investors.
In the past, similar price zones have indicated times of indecision, which frequently precede significant bullish or bearish trends. According to Alphractal, this region recently visited by BTC is considered to be the final support level before a more severe downward move.
However, the most likely scenario for BTC is a price capitulation if the asset increases but, for whatever reason, loses the third dotted line on the chart based on past data. In the meantime, the level has served as support and has been respected over the past year.
After reaching the critical region, several market participants contend that the present price action is mirroring the movement from the 2021 cycle, particularly between April and May. If such is the case, Alphractal noted that the development does not necessarily indicate that Bitcoin has entered a bear market. Meanwhile, it implies a liquidity sweep that targets long positions.
Nonetheless, if Bitcoin remains above the area indicated by the arrows in the chart, the market is probably entering a new accumulation cycle, signaling the end of the ongoing correction. The shift in a new accumulation cycle is likely to spark further price increases in the upcoming months.
Investors Showing Renewed Confidence In BTC
The past few days have been challenging for Bitcoin as it faces constant fluctuations. Despite the bearish performance, BTC investors’ optimism gradually returns to the market, triggering accumulation among small or retail holders.
Data from Santiment shows a notable increase in small BTC wallet addresses amid current volatility. This increase coincides with BTC’s rebound to $90,000 on Wednesday after prices have been fluctuating near the level since the beginning of March.
Currently, there are 50,000 more wallets on the network compared to a month ago. Wallets containing less than 0.1 BTC have increased by 37,390, while those holding between 0.1 and 100 BTC have risen by 12,754.
Furthermore, wallets holding at least 100 BTC have decreased by just 6. Once wallets holding 100 BTC begin to rise again, Santiment claims it could signal that a crypto-wide breakout might be on the horizon.
Featured image from Unsplash, chart from Tradingview.com
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