Bitcoin Accumulating or Headed for a Correction – Here’s Why

• Bitcoin has regained ground after dumping below $50K, recovering 7.77% in the last day and reaching $54,900.
• ETF performance is looking good, with many buying the dipand showing confidence in the market.
• Evidence shows Bitcoin might head in one of two directions: complete its accumulation phase and start a bull run or experience a massive correction before heading up.

Despite the current crypto market crash, Bitcoin ($BTC) has regained 7.77%in the last 24 hours, reaching $54,900. Ethereum ($ETH) is also up by 9.08%, with a 9.16% increase in its market cap.

According to analysts on X, Bitcoin's current decline might lead to a bull run, similar to what happened in 2016. Back then, $BTC dropped from $650 to $474 and rose to $20K within a month.

$BTC's recent dump below $50K is remarkably similar to what happened in 2016, though this might not be the bottom.

$ETH ETF investors are also buying the dip, showing that trust in the market is not lost. Will this lead to a bullish turnover, or is a correction coming?

Let's explore the crypto market's movements and see whether Bitcoin is accumulating or headed for a correction.

Bitcoin's Accumulation Phase Might Be Over - Incoming Bull Run?

Bitcoin's current market performance is a reminder of 2016's bull run that sent $BTC up by 4,119%, from $474 to $20K.

Both in 2016 and 2024, Bitcoin declined by 26-27% post-halving, leading up to a major bull run. According to Peter Brandt's (crypto analyst) chart, we might be 16 weeks away from a bull run.

Please note that $BTC decline since halving is now similar to that of the 2015-2017 Halving Bull market cycle pic.twitter.com/cIm3WKzBog

- Peter Brandt (@PeterLBrandt) August 5, 2024

ETF traders are also enjoying the current market crash and are buying the dip, with $ETH ETFs registering a $49M net inflow and $BTC ETFs a $168M net outflow.

Rich Rosenblum, co-founder of GSR Markets, notes that Bitcoin's current trajectory is positive, and market sentiment could easily send it toward $70K.

It was only nine days ago that the BTC community was arguably the most bullish it's ever been. [...] BTC could rally back to $70,000 plus, just as quick as it sold off.Rich Rosenblum, GSR Markets co-founder

However, it's unclear if we've hit the bottom. With Bitcoin's recovery above $50K, will it hover at the same level or attempt another correction?

Bitcoin Might Hit a Bottom in the Correction - Reasons to Worry?

ITC Crypto founder Benjamin Cowed stated on X that Bitcoin's current performance is similar to 2019's correction. $BTC fell from $10K to ~$4.2K in the second half of the year after massive accumulation during Q1.

Source - Coin Telegraph

If the pattern turns true, Bitcoin is heading for another correction before skyrocketing to new ATHs. This means smart investors may be able to buy the dip and make significant profits.

Tim Kravchunovski (CEO of Chirp) noted that the current market crash isn't crypto-specific. Instead, other macroeconomic factors (like fear of a recession and the poor US employment data) take center stage, which could mean crypto will recover swiftly.

Over the coming hours and days, we may well see a decoupling of crypto from traditional stocks, similar to what we saw in 2020. Back then, crypto staged a much faster and more pronounced recovery from the pandemic-driven collapse than traditional stock markets, and we may well see something similar this time.Tim Kravchunovski, Chirp CEO

Many investors (especially HODLers) remain bullish, betting on Bitcoin's recovery and similarities to past bull runs. The current crash might be partly caused by investors with shaky hands' who act impulsively.

Peter Szilagyi, an Ethereum Foundation developer, echoes this sentiment and claims that crypto is a damn casino for dum-dums...'

Our Verdict - Is Bitcoin Accumulating or Headed for Correction

At this point, Bitcoin's performance (and the entire crypto market) can go one of two ways:

1. End the accumulation phase and surpass $70K toward new ATHs.
2. Complete one final correction before heading up.

There's evidence for both scenarios and making any serious prediction is untenable at best. The next few weeks will define Bitcoin's future performance.

References

• Bitcoin decline is similar to the start of the 2016 bull run - Peter Brandt (CoinTelegraph)
• Peter Szilagyi X Post About Crypto Market Crash (X)

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