YEREVAN (CoinChapter.com) – Bitcoin (BTC) price stood just below the crucial support of $20,000 on July 12, after consolidating sideways since mid-June. However, the temporary stall might be an accumulation phase.
A crypto analyst believes Bitcoin’s indecisive price action could be a part of the Wyckoff setup, a technical indicator that points to a potential bullish reversal after strong downtrends.
The Bitcoin Wyckoff setup features an “accumulation” period, followed by a breakout. After the breakout reaches a certain point, roughly $30,000 for BTC, the price action will likely consolidate in the “distribution” phase and drop.
Also read: Bitcoin (BTC) to $12K next amid BTC' tourist' purge.
Additionally, Bitcoin’s on-chain metrics point to an upcoming reversal.
June 2022 report from digital currency prime broker Genesis stated that the long-awaited bottom might be in this month, as the Market Value/Realized value ratio (MVRV Z-score) is primed for a reversal.
The report also singled out Bitcoin halving as a critical factor in BTC price predictions.
The cycle pattern so far in Bitcoin’s history has been that the price reaches a new local high approximately one to two years after the previous halving, then drifts down for about a year, before rallying into the next halving.
specified Genesis.
As the latest halving took place in May 2020, the historical pattern suggests an uptrend in 2023, before the next halving in 2024. However, Bitcoin’s growing adoption resulted in its dependency on equities and other risk-on assets.
The correlation also means that the digital asset’s susceptibility to macroeconomic factors is heightened.
The macro narrative in June shifted from inflation concerns to recession fears, and risk-on assets were caught in the crossfire. Thus, Bitcoin bulls might not have much to celebrate just yet.
If BTC price action confirms the Wyckoff accumulation, it could rise to approximately $30,000 before the distribution period.
However, the flagship cryptocurrency depends on an array of factors, such as the Federal Reserve’s hawkish policy, recession fears, the ongoing war in Ukraine, and skyrocketing prices for fuel. As of July 12, BTC/USD exchange rate stood at $19,700, the lowest price since December 2020.
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