This is it:
- Grayscale’s team has predicted that Bitcoin will see further price movements in the negative or sideways direction for another five to six more months.
- Grayscale cites the 4-year-old Bitcoin and crypto cycles as the basis of their conclusion.
- The team also highlighted an increase in the number of wallets holding 0.001 – 0.01 BTC, 0.01 – 0.1 BTC, and 0.1 – 1 BTC.
Grayscale’s analysts have released a report Analyzing the crypto bear market and Bitcoin.
Bitcoin Might See Another 5 – 6 Months of Downward or Sideways Price Movement.
The report starts by examining the four-year cycle of the Bitcoin and crypto markets. These cycles are often aligned with the BTC halves event. According to Grayscale, the 4-year cycles are approximately 1,275 day long.
They pointed out that ‘the 2012 and 2016 cycles lasted approximately 4 years, or 1,290 and 1,257 days respectively.’ In addition, from each peak value to a bottom, Bitcoin ‘took 391 days to fall 73% in 2012, and 364 days to fall 84% in 2016.’
A similar analysis revealed that the current 2020 cycle is approximately 1,198 days old, with Bitcoin likely to have another five to six month to reach a bottom. They explained:
As of July 12, 2022 we are 1,198 days into the 2020 cycle. This could mean that there are approximately four more months before the Realized Price crosses above the Market Price.
Bitcoin is currently 222 days away from its all-time high. This means that we could see another 5–6 months of price movements either sideways or downward.
Market bottoms appear to be one month earlier with each cycle.
Grayscale also observed that a Bitocin or crypto bottom would arrive one month earlier than anticipated in each market cycle.
Bitcoin Wallets Holding 0.001 – 0.01 BTC, 0.01 – 0.1 BTC, and 0.1 – 1 BTC Have Increased.
Grayscale noted an increase in Bitcoin addresses holding between 0.001 and 1 BTC. They explained that the increase in such addresses was due to investors using the bear market to their advantage and accumulating more Bitcoin. They stated:
These are just a few of the many [Bitcoin] Outflows [from exchanges] Investors may have taken advantage of this discount to increase their positions.
The number of wallet addresses that hold.001-.01 BTC and.01-.1 BTC has risen sharply to new all-time highs.
This marks an interesting change in market sentiment as, historically, smaller investors have decreased their positions sizes in times of uncertainty – notably in 2018 after the price of Bitcoin fell from ~$20k.