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Home Technical analysis BTC

Bitcoin Approaches Top Of Accumulation Zone, Parabolic Phase Begins With Breakout

Tony Spilotro by Tony Spilotro
5 months ago
in BTC
Reading Time: 4min read
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Bitcoin every four years post-halving goes parabolic and rises to a new all-time high. The ebb and flow of these cycles each time attracts new money and participants to the cryptocurrency network and keeps adoption growing. Timing when to sell is the hardest part, but knowing when to buy BTC at the best possible prices before it goes parabolic, might be as easy as buying within a long-term “accumulation zone” that has supported each of the cryptocurrency’s past bottoms.

The leading cryptocurrency by market cap is now approaching the top of this zone, and beyond $20,000 the chance to buy cheap BTC will forever be gone. Here’s a look at the long-term significance of the “buy” band and some insight into if the cryptocurrency will break out into its full parabola now, or after perhaps one more crash.

Bitcoin Rises To Top Of Accumulation “Buy” Band, But Correction More Likely Than Breakout

Bitcoin price is currently trading just below $18,000 after rising from $3,800 earlier in the year. The leading cryptocurrency by market cap reached the low after kicking off the year with a bullish rally to $10,000, followed by the pandemic panic crash now known in hindsight as Black Thursday.

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Related Reading | Bitcoin Experts Claim Post-Halving Performance Is More Bullish Than Pre-2017

And even though Bitcoin is now trading as so much higher of a price, the cryptocurrency is technically still in the same accumulation range, according to a long-term “buy” band that between two market cycles, represented the best opportunity to buy BTC before the asset goes parabolic.

bitcoin long term buy band

Bitcoin "buy" band and parabolic market cycles compared | Source: BTCUSD on TradingView.com

Once Bitcoin left the “buy” band pictured above in early 2017, it didn’t revisit the accumulation zone until the $20,000 record was reached. Comparing the four rejections from the top of the “buy” band in late 2015 and 2016 with the most recent cycle, could indicate that the current rally is taking place too soon, and a pullback to and of the lower segments of the “buy” band might follow.

Cryptocurrency Market Cycles Compared: When Will BTC Go Parabolic In 2021?

Bitcoin didn’t set a new all-time high with the third peak and “buy” band rejection, during the first rally of 2017. The vertical red line represents where the cryptocurrency is this time around during its market cycle, in accordance with its distance from the previous peak.

bitcoin buy zone 2017

There were four rejections before Bitcoin went parabolic in 2017 | Source: BTCUSD on TradingView.com

Considering Bitcoin’s roughly every four-year pre-programmed block reward halving, each cycle should be somewhat predictable given the same dynamics and factors are at play.

That would suggest that the current price action is once again too overheated, much like it was in 2019, and at least one more correction is next.

As the market transitioned from bearish to bullish in late 2015 and early 2016 into 2017, four total rallies were rejected by the top band, before the asset went parabolic and returned to price discovery.

bitcoin buy zone 2020

Bitcoin could have one more crash before going full parabolic | Source: BTCUSD on TradingView.com

A new accumulation phase began when the cryptocurrency fell to the middle line of the “buy” band at its bear market bottom.

The initial “echo fractal” of the crypto bubble, as it was called at the time, caused the cryptocurrency to run hotter than it should have thanks to the PlusToken Ponzi scheme that was prominent at the time.

A second phase of the bear market resulted. And while Bitcoin is certainly overheated once again, topping out here likely won’t lead to any dangerous downside or new lows.

Related Reading | Technical Expert Shows How Bitcoin Path Could Reach Gold’s $10 Trillion Cap

By all intents and purposes, Bitcoin has started a new bull market. According to the last cycle and the adherence to the “buy” band above, a correction is likely for the cryptocurrency to stay on a similar course as the last cycle.

If it continues to do so, two more decent-sized corrections could arrive between now and a new peak. But the band is certainly one to watch, as when Bitcoin does finally break free of it, the parabolic phase of the bull market will begin.

Featured image from Deposit Photos, Charts from TradingView.com
Tags: bitcoinbtcbtcusdbtcusdcBTCUSDTcryptoxbtxbtusd
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Tony Spilotro

Tony Spilotro

I'm Tony Spilotro. Behind the pseudonym, I'm a global remote work leader with a decade of award-winning content experience and excellence. Here, I explore my newfound passions pertaining to privacy, finance, economics, politics, cryptography, property rights, and other libertarian-esque views. I am a Bitcoin evangelist, maximalist, and educator whenever I can be, helping to spread its message of freedom from government control, monetary policy mismanagement, and passing the buck - literally – to future generations. My journey from a curious retail crypto investor to a serious Bitcoin advocate, trader, and technical analyst is an unusual one, but life-changing nonetheless and has become less about money and more about a long-overdue revolution. While a firm believer in the laws governing math and science, I am profoundly fascinated by the impact of astrology and astronomy including moon and solar cycles and planetary alignment and their ability to influence and potentially predict markets. It hasn't yet clicked for me as to how to put anything to use, but I consider it my current rabbit hole I can't yet dig out of. My perspective of growing up alongside the internet, the dot com era, the Great Recession, and roots in video games collecting coins and rare items caused Bitcoin to immediately make sense to me. Through all of these lenses, I seek to produce content that is educational and entertaining, and I thank you sincerely for taking the time to read what I have to say. Please follow me on Twitter and feel free to drop me a line if you would like to work together.

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