A recent on-chain evaluation has been published, which suggests that Bitcoin may be entering into a classic deceptive phase in its market cycle, a dynamic that poses a trap for potential market participants expecting a straightforward price recovery.
While the rise in realized losses usually signals a local price bottom formation due to wipeouts of these weaker hands, Sunny Mom also warns that such conjecture holds no significant water in this scenario, because the current stage of the market cycle (cooling phase) is one where buy-side strength can only be verified with presently unavailable data.
However, there is a concurrent accumulation among the ‘smart money’ investors. As seen in the chart above, Sunny Mom notes there is a momentum shift in the market pattern, as the 30-day % change in investor accumulation pattern has flipped into positive values from negative readings, alongside the total Whales’ Total Balance showing signs of gaining stability and a slight upward orientation. All of these positive developments began unfolding within the $80,000-$95,000 price levels amid the market-wide panic, reflecting that smart money investors are highly attracted to this price range and are accordingly accumulating within it.
Notably, the bullish signs, i.e., whale balance stabilization and accumulation patterns identified by Sunny Mom, suggest that a local price bottom could soon be established, leading to a price rebound in the short term.
However, the on-chain analyst warns that this possible price rebound may not necessarily extend into a sustained upward rally. In the right conditions are right conditions as seen earlier this year, Bitcoin may record a price rally into January next year, where a ‘lower high’ close to the ATH is formed, or perhaps the ATH value might even be tested.
Notably, Sunny Mom also warns that Bitcoin’s oldest holders, its ‘Old Whales’, remain largely inactive despite weakening prices and increased accumulation. This inactivity can result in a trap where even the modest price recovery may trigger Old Whale selling activity, which historically signals the end of market cycles. As of this writing, Bitcoin is worth $84,301, reflecting a 1.09% loss over the past day.
