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BTC Bitcoin rebounded strongly by nearly 30% in August, but investors faced two very different market scenarios
Bitcoin achieved a gain of about 30% in August, showing a strong recovery momentum. However, investors are currently facing two different market outlooks: some believe the bear market is over, while others insist that Bitcoin still faces the risk of a sharp decline.
Alphractal founder Joao Wedson specifically pointed out that investors should pay attention to the key price of $38,400, as this is a typical location where the "capitulation" area has appeared many times in Bitcoin's history.
Why is "balancing prices" important to Bitcoin?
According to Wedson's analysis, the current "Balanced Price" indicator is approximately $38,400. But he emphasized that although the region has played a supporting role in past cycles, this does not mean that Bitcoin will inevitably return to the same level.
"Equilibrium Price" is a valuation indicator that adjusts Bitcoin's overall cost base by taking into account the selling of old coins by long-term holders. Historical data shows that when BTC experiences fierce market capitalization and forms a cyclical bottom, this indicator can often reveal important support areas.
However, it is worth noting that the frequency with which this indicator interacts with Bitcoin prices is increasing with each cycle. From the initial 732 days, it has gradually extended to 1,120 days, 1,200 days, and to the current 1,420 days.
In the current cycle, it has been approximately 1,400 days since Bitcoin last hit an equilibrium price. At the same time, the time when BTC prices fall below this indicator is significantly shortening. In previous cycles, prices stayed below the region for several weeks; in subsequent cycles, this period was shortened to about 20 days; by 2022, Bitcoin stayed below the equilibrium price for less than a day.
Will Bitcoin fall to $38,000 again?
Although the current equilibrium price is around US$38,400, this does not mean that this level must be tested in the future. Wedson's views suggest that Bitcoin may completely deviate from historical patterns and never return to this area.
On the other hand, if the historical structure is followed, the area near $40,000 may still retain its importance as a potential appropriation target at the on-chain data level. Therefore, this level should be seen more as a historical valuation area worthy of attention than as an absolute fixed price target.
Does excessive optimism pose a risk?
As the market grows confident that the bottom of the market is over, Wedson's social media analysis shows that "Very Bullish" excessive optimism is becoming increasingly prominent.
Compared with the uncertainty from the end of 2022 to the bottom of early 2023, the current market shows a stronger optimism. However, excessive rising expectations may themselves breed new risks. If Bitcoin encounters a heavy sell-off, the forced liquidation of long positions could trigger a new wave of selling. Therefore, rising positivity in the cryptocurrency market does not always mean a safe signal for price movements.
Can Bitcoin hit a new high faster?
There is another view in the market that the market cycle of Bitcoin is gradually shortening. Analyst Killa predicts that BTC may reach a new all-time high in the fourth quarter of next year and is expected to remain above $126,000 until November 2027.
The analyst believes that Bitcoin should break the record by February 2028 at the latest based on cyclical model calculations for 2022. But he argued that the current cycle is advancing faster.
The main reason for this is that Bitcoin reached the bottom of the cycle three to four months earlier than expected. If this trend continues, the expected date for the new historical high (ATH) may also be advanced. Comprehensive tracking of long-term indicators such as balanced prices, market sentiment and cycle length will provide investors with a healthier and comprehensive market analysis perspective.
Disclaimer : The content of this article does not constitute any investment advice. The market has high-risk characteristics, please conduct independent research before making an investment decision.
