Is it time to accumulate Bitcoin?

 

Bitcoin is a cryptocurrency that has experienced significant price volatility throughout its history. However, if you look at the long-term price, you can identify a pattern of market cycles that repeat approximately every four years.

The market cycles of Bitcoin

A Bitcoin market cycle consists of three phases:

Bull run: It refers to a period in which the price of Bitcoin and market sentiment are predominantly positive, leading to a steady or significant increase in its value. During a bull market, investors display widespread optimism about Bitcoin and tend to buy and hold their positions, expecting the price to continue rising.

In a Bitcoin bull run, there is an increase in demand for this cryptocurrency, which can be attributed to various factors such as growing adoption, institutional investment, public interest, and the perception that Bitcoin is an attractive investment. Investors are typically willing to pay higher prices for Bitcoin with the hope that its value will continue to rise.

Bear market: It refers to a period in which the price of Bitcoin and market sentiment are predominantly negative, leading to a constant or significant decrease in its value. During a bear market, investors tend to be pessimistic about the future of Bitcoin and often sell their positions or stay on the sidelines rather than buying.

In a Bitcoin bear market, the demand decreases, and investors may be concerned about factors like volatility, regulatory uncertainty, or the lack of public interest. The price tends to fall as more Bitcoins are sold than bought.

Accumulation: The price of Bitcoin remains stable or fluctuates moderately.

Stock-to-flow chart

Bitcoin shares similarities with valuable commodities like gold, silver, and platinum due to its scarcity, granting them the status of "stores of value" over time. To measure this scarcity and its impact on price, the stock-to-flow model is used, comparing current inventories with annual production of these commodities. When the ratio is high, it suggests that most of these commodities are not used in industrial applications but are held as financial assets, reflecting increasing scarcity and, consequently, greater value as a wealth reserve.

This concept is applied to the world of Bitcoin through the stock-to-flow model, which predicts that the price of this cryptocurrency will increase over time as its supply becomes more limited.

The relationship between market cycles and the stock-to-flow chart

The stock-to-flow chart has had notable success in predicting Bitcoin's price highs. In each market cycle, the price of Bitcoin has reached a peak near the stock-to-flow line..

How long is it a good idea to accumulate BTC before the next Bull Run?

According to the stock-to-flow chart, the next Bitcoin Bull Run could start in April 2024. Therefore, if you want to accumulate BTC at a reasonable price, it's advisable to keep that date in mind.

Source: https://www.lookintobitcoin.com/es/charts/stock-to-flow-model/ 

Conclusion

Bitcoin market cycles are a well-documented phenomenon. The stock-to-flow chart is a model that has had remarkable success in predicting Bitcoin price highs. According to the stock-to-flow chart, the next Bitcoin bull run could start in 2024.

How to accumulate BTC?

There are several ways to accumulate BTC. One way is to buy BTC directly on a cryptocurrency exchange. Another way is to mine BTC. It's also possible to earn BTC through staking rewards or decentralized lending services.

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Warning: Investing in cryptocurrencies carries risks. It's important for investors to conduct their own research before investing in any digital asset.

This is purely an informational article and does not provide investment advice.