Bitcoin (BTC) price action may be setting up for another “acceleration phase”

A recent Fidelity Digital Assets report questioned whether Bitcoin price had already seen its cyclical “blow off top”

A recent report by Fidelity Digital Assets has sparked discussion among crypto enthusiasts as it questioned whether Bitcoin (BTC) price had already seen its cyclical “blow off top” or if the cryptocurrency is on the cusp of another “acceleration phase.’

According to Fidelity analyst Zack Wainwright, Bitcoin’s acceleration phases are characterized by “high volatility and high profit,” similar to the price action seen when BTC pushed above $20,000 in December 2020.

While Bitcoin’s year-to-date return reflects an 11.44% loss, and the asset is down nearly 25% from its all-time high, Wainwright says the recent post-acceleration phase performance is in line with BTC’s average drawdowns when compared to previous market cycles.

Bitcoin historical downside after acceleration phases. | Source: Fidelity Digital Assets Research

Wainwright suggests that Bitcoin is still in an acceleration phase but is moving closer to the completion of the cycle, as March 3 represented day 232 of the period. Previous peaks lasted slightly longer before a corrective period set in.

Is another parabolic rally on the cards for Bitcoin?

Bitcoin price has languished below $100,000 since Feb. 21, and a good deal of the momentum and positive sentiment that comprised the “Trump trade” has dissipated and been replaced by tariff-war-induced volatility and the markets’ fear that the US could be heading into a recession.

Despite these overhanging factors and the negative impact they’ve had on day-to-day Bitcoin prices, large entities continue to add to their BTC stockpiles.

On March 31, Strategy (NASDAQ:MAGA) CEO Michael Saylor announced that the company had acquired 22,048 BTC ($1.92 billion) at an average price of $86,969 per Bitcoin. On the same day, Bitcoin miner MARA (NASDAQ:MARA) revealed plans to sell up to $2 billion in stock to acquire more BTC “from time to time.”

Following in the footsteps of larger-cap companies, Japanese firm Metaplanet issued 2 billion yen ($13.3 million) in bonds on March 31 to buy more Bitcoin, and the largest news of March came from GameStop (NYSE:GME) announcing a $1.3 billion convertible notes offering, a portion of which could be used to purchase Bitcoin.

The recent buying and statements of intent to buy from a variety of international and US-based publicly listed companies show a price-agnostic approach to accumulating BTC as a reserve asset, and it highlights the positive future price exceptions held among institutional investors.

While it is difficult to determine the impact of institutional investor Bitcoin purchases on BTC price, Wainwright said that a metric to keep an eye on is the number of days during a rolling 60-day period when the cryptocurrency hits a new all-time high. Wainwright posted the following chart and said, "Perhaps this is a close variant of the "greater fool theory' but it does appear that during periods of high and increasing days at a new all-time high, we observe a strong directional bias in price and/or an unwillingness to correct significantly from the new highs."

Bitcoin’s number of all-time high days (rolling 60 days). | Source: Fidelity Digital Assets Research