Bitcoin is experiencing one of the most challenging stages of its journey to being a widely adopted asset class. Still, these challenging times are not new to the asset, having faced worse market conditions and emerged triumphant.
Most recently, data has revealed that 40% of all the BTC in circulation are currently in loss amidst the failing markets. However, a notable analyst has highlighted a strong accumulation zone at this level.
BTC accumulation zone primes the asset for an impending rally
BTC’s maximum supply is 21 million tokens. Out of these, about 19.1 million tokens are currently in circulation. Notable BTC analyst and creator of the renowned Stock-to-flow (S2F) Model, PlanB (@100trillionUSD) has unveiled a chart that indicates that 40% of these 19M BTCs in circulation are currently in loss.
As shown on the chart, PlanB further noted that BTC is currently trading in the accumulation zone which would attract more purchases from institutional investors while the asset’s price maintains a decent measure of stability.
This analysis was picked up from historical trends witnessed at current levels. The accumulation zone would immediately precede a surging rally in the asset’s value after enduring for a while. During the toughest times of the COVID-19 pandemic, the accumulation zone lasted for about 1 month, preceding a surge that saw the asset close the year at $28,201, having begun at a price of $7,194.
On the other hand, the accumulation zone of 2011 lasted for about 2 months before a price rally. The 2018/19 accumulation zone had a persistent run of 6 months, while the accumulation zone of 2014/15 remains the most enduring to date, with a lasting period of 9 months. PlanB noted that while there is uncertainty in how long this current one will last, a rally is imminent.
BTC appears to be shedding the gains of early July
Meanwhile, after recovering some of the losses incurred in the heat of the past month, Bitcoin has recently started trading below the $22k mark. The asset currently trades at $21,954 as of press time – a 9% drop from its $24,196 peak this month. BTC appears to be shedding the gains picked up at the outset of the month, but most metrics remain bullish.
Long-term holders appear to have an intent of holding their tokens, as shown by the BTC Binary CDD – with a value of 0.2, there is an indication of low long-term holders’ movement. The dormancy shows that long-term holders are not selling off their tokens.
Additionally, the Coinbase Premium Index shows a relatively strong buying pressure on US institutional investors on Coinbase. The Crypto FGI has remained at a value of 30 since yesterday – despite indicating “Fear,” this is an improvement from the value of 14 seen 30 days ago.