Bitcoin Market: Is It Time to Buy the Bottom?

Bitcoin Market: Is It Time to Buy the Bottom?

As the Bitcoin market has gone through its ups and downs, investors have been looking for the best entry point. Today, we will discuss historical retracements, the length of market cycles, and specifically the bottom-picking opportunities and re-accumulation ranges in depth to provide you with valuable insights.

First, looking back at this cycle since the market bottom in November 2022, we have witnessed multiple retracements. Specifically, there have been six major retracements in this cycle, and the current retracement is the sixth of these six. Historically, a retracement close to 20% usually indicates the arrival of a bottom, and in this cycle, we have seen retracements of more than 20% several times.

For example, in January 2023, Bitcoin experienced a retracement of about 23%, which was surpassed by the subsequent pre-harvest retracement, which reached 23.8%. But it is worth noting that even after these deep retracements, the market was able to recover and continue to rise. In the current retracement, we are seeing a retracement of about 19%, which is one of the shallowest retracements in this cycle so far. If we average all of these pullbacks, we get an average pullback of about 22%, which means that the current pullback has not yet reached the average.

In addition to the depth of the pullback, we also need to consider the duration of the pullback. In past cycles, we have witnessed pullbacks ranging from 3 weeks to 63 days. The current pullback is approaching 40 days, gradually approaching the average pullback duration (about 42 days). This shows that although we have not yet reached the average pullback duration, we are very close.

Next, let's talk about bargain hunting opportunities. In the Bitcoin market, bargain hunting opportunities usually appear when the price revisits the bottom of the re-accumulation range and generates a downside false breakout (wick) before breaking out of the range. This price action pattern is also reflected in the current pullback, indicating that we may be in a good opportunity to buy a bargain. It is worth noting that such opportunities are often accompanied by extreme fear and pessimism in the market, but it is these emotions that provide investors with opportunities to enter the market.

Looking back at history, we can see that re-accumulation ranges often appear after harvest periods. After the harvest period in 2020, we observed two such ranges. Similarly, after the current harvest period, we also saw the formation of a re-accumulation range. This further confirms the continuation of the historical trend.

However, it is worth noting that even if a re-accumulation range is formed after the harvest period, it often takes a while for the market to break out of the range. In the 2020 example, the market broke out of the re-accumulation range about 160 days after the harvest period. This means that although we may be close to the bottom, the real breakout may take some time.

In addition, the current re-accumulation range presents an M-shaped or double-top pattern. However, this pattern is likely to be broken by subsequent consolidation and continue to move upward. If we measure the time from breaking into the range to breaking out of the range, we will find that we are currently only about halfway through the range. This means that we may have quite a long time to enjoy this re-accumulation process.

In summary, although the Bitcoin market is still in a correction phase, there are signs that we may be close to the bottom. Investors should pay close attention to further developments in the market to find the best bottom-picking opportunities. At the same time, it is also very important to remain patient and rational, because the real breakthrough may take some time to achieve.