Bitcoin spring? Wyckoff ‘groundhog’ indicates crypto winter may last another 6 weeks
The Wyckoff Accumulation technical chart pattern has become the latest trending topic when anticipating where the price of Bitcoin (BTC) may go next. Some analysts have said that BTC’s recent dip below $29,000 signaled the “Spring” phase, which will soon be followed by a climb higher.
BTC/USDT price vs. Wyckoff Accumulation model. Source: Twitter
While the bulls make the case for the continuation of the bull market trend seen earlier in 2021, others are warning that the price of Bitcoin is not out of the woods yet, particularly in the short term.
According to Filbfilb, an independent market analyst and co-founder of the Decentrader trading suite, bullish traders may have gotten ahead of themselves and could be mistaken about the pace of recovery.
Wyckoff appears to be the flavour of the month at the moment.
Over the years ive noticed that most people all do one main thing in common which is to assume that the accumulation will happen quicker than it actually does and ignore the size of the drawdown. pic.twitter.com/bqWeFBVtV3
— f i l ₿ f i l ₿ (@filbfilb) July 2, 2021
Notably, the Wyckoff pattern has been redrawn multiple times over the past couple of weeks as chartists attempt to have the price action match their view of what happens next, potentially ignoring other warning signs and avoiding data that doesn’t fit their perspective, according to Filbfilb.
“I’ve seen it drawn and redrawn countless times over the past few weeks… but if it is an actual bottom there tends to be some correlation between the size of the downtrend and the amount of time reaccumulation takes to occur.”
GBTC threatens to spoil the recovery
One of the biggest barriers to a BTC recovery higher identified by many is the Grayscale Bitcoin Trust unlock schedule, which shows a large amount of GBTC yet to be unlocked in mid-July.
On July 12, Grayscale Bitcoin Trust (GBTC) will unlock 2 thousand BTC (~ $ 69M), and on July 17, another 16 thousand BTC (~ $ 550M) and investors will be able to sell their shares of the bitcoin trust, purchased in January (32k-42k $ for BTC).
— Mr. Prosperity (@_i2288_) June 30, 2021
As seen in the chart below, the largest GBTC unlock of the year will occur in July and has the potential to put downward pressure on price, particularly since some previous big unlock dates coincide with major BTC price volatility in recent months.
Related: 3 things traders are saying about Bitcoin and the state of the bull market
Grayscale Bitcoin trust unlock schedule. Source: bybt.com
Because of these potential headwinds, Filbfilb says that what happens in the near term is “too early to call as we haven’t done enough time at the bottom,” further indicating that it might take until early Q4 before the cycle plays out.
“If it does play out I would think it looks like the chart I share with it finishing up late Q3 / early Q4 and we would probably see another swipe at the lows after retesting supply…”
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