Why Bitcoin Is Set For A Mid-Cycle Price Explosion – How to Buy BTC

Crypto Exchanges Face Outages as Bitcoin moves to fresh highs
Crypto Exchanges Face Outages as Bitcoin moves to fresh highs

Bitcoin could be on the brink of a mid-cycle price explosion, according to chain and price data. While BTC has fallen by 37% since its April 14 all-time high of $64,804, long-term holders are beginning to accumulate the cryptocurrency for the first time since October 2020.

A recent report from Pantera Capital also shows that bitcoin’s price is 36% below its 11-year trend, indicating a good time to buy. At the same time, historical parallels with the 2017 bull market suggest the market may be about to surge.

Of course, historical data is no guarantee of anything. Nonetheless, most of the available indicators are pointing in a positive direction. And with bitcoin’s price recovering nicely over the past few days, now could be the beginning of an upswing.

Bitcoin profit: signs BTC is on the brink of a mid-cycle price explosion

According to glassnode data, long-term bitcoin holders are now accumulating more BTC than they’re selling. As the tweet below shows, Holder Net Position Change has turned positive for the first time since October.

By ‘holder,’ glassnode means anyone who has bitcoins that haven’t moved for at least 155 days. And with the Net Position Change moving into positive territory (i.e. turning green), this means that such holders are now stocking up on BTC.

A second glassnode chart also shows that long-term holders have bought up over half a million BTC since May. Basically, these holders are reducing the circulating supply of bitcoin, increasing the chance of big price rises.

Why bitcoin is set for mid-cycle price explosion chart

Other data supports this increasingly bullish picture. A report published by Pantera Capital on Monday suggests that bitcoin is currently undervalued.

Bitcoin is set for mid-cycle price explosion 11-year trend chart
Source: Pantera Capital

Bitcoin is currently priced 36% lower than its 11-year exponential trend. In other words, it’s cheaper than its projected growth (based on historical data) would suggest. If nothing else, this indicates a good time to buy, although Pantera also notes in its report that most traders have an unfortunate tendency to buy BTC when it’s overpriced.

Regardless, bitcoin falling below its trend price lends weight to the idea that it’s nearing a mid-cycle price explosion. History provides another sign of this. As shown below, the behaviour of the market is closely following the pattern set back in 2017. Back in 2017, the market surged to a high of above $3,000 on June 11. It then fell to $1,927 on July 16, according to CoinGecko. However, it recovered from this drop and went on to reach a then-high of $19,783 in December 2017.

Bitcoin mid-cycle explosion bull market

This happened following the July 2016 halving, and something similar is happening in the wake of the May 2020 halving. This certainly doesn’t guarantee bitcoin a mid-cycle price explosion, but it highlights the possibility of one.

How to Buy BTC

The best place to buy bitcoin is on a reputable, regulated exchange. Good examples include eToro, which supports multiple cryptocurrencies and is available in the U.S., U.K. and pretty much all of Europe. Other good major platforms include Coinbase and Kraken, which are based in the United States but also serve a large number of other countries.

However, if you do buy a significant sum of bitcoin on an exchange, consider investing in a hardware wallet. These let you store your bitcoin (and other cryptocurrencies) offline, and represent the securest way of holding crypto. The best examples include Ledger Nano S/X and Trezor One/Model T.

Looking to buy or trade Bitcoin (BTC) now? Invest at eToro!

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Remember, all trading carries risk. Past performance is no guarantee of future results.

Simon is a professional blockchain, cryptocurrency and tech journalist, regular contributor to Cryptonews.com, who is writing in depth analysis about the latest developments in the cryptocurrency and blockchain space. He's written for Wired, the Daily Dot, and TechCrunch, and aside from cryptocurrency and the blockchain he's interested in AI, VR, social media, and how technology changes society. He's based in London.