According to a study released by VanEck on 18 August, bitcoin may be approaching a new accumulation phase. At the same time, however, the institution stressed that the current signal was more like a release of pressure in the later part of the cycle and did not directly indicate that the market had reached its bottom.

Eight signals are still activated.

Its research revealed that, as at 12 August, 8 of the 12 Bitcoin “surrender” indicators were still in trigger status. For the past three months, all 12 indicators have once entered the relevant zones. According to VanEck, the market is still in the recovery phase after greater volatility.

Indicators used by VanEck include price reversals, volatility, long-term holder behaviour, etc. By its calibre, a price withdrawal signal is triggered when Bitcoin is at least 35 per cent higher than its predecessor. According to the agency, Bitcoin fell about 49 per cent higher than last October in the current analysis period.

However, VanEck also acknowledged that this decline was not the deepest in the history cycle of Bitcoin. The Agency believes that the increase in institutional hold and the demand for real-time bitcoin ETP in the United States may have allowed this round down to a lower extent than in the past Bear City. The largest retreat areas in Bear Towns were approximately 78 to 94 per cent.

Six months without a clear edge.

The results of VanEck's return show that, when 8 to 12 indicators fell into “surrender” at the same time, Bitcoin's average return for the next 90 days was 12.8 per cent, below the overall average of 15.2 per cent for the comparable period; and for the next 180 days, 32 per cent and below the baseline level of 36.3 per cent.

Only when it lasts until the one-year cycle does this group of signals show relatively better performance. According to VanEck, however, this result is based on highly overlapping sample ranges, with few market stages for independent reference, and therefore does not give too much weight to this conclusion.

This means that the signals are better suited to identify whether the market is entering the latter part of the cycle, rather than to judge that the bottom has been formed. With this framework, Bitcoin could still go through a sorting exercise before it actually enters the continuum of repair.

ETF Reflows Against Pressure

During the 30-day period covered by the study, the United States spot bitcoin ETP combined net inflows of about $663 million, or approximately 104,000 BTCs at current prices, largely offset some of the external pressure of about $2.4 billion a month earlier.

In mid-August, the flow again weakened. As of the week of 14 August, net outflows from the United States Cash Fund were approximately $385.2 million. However, demand has since recovered. Farside data show a net inflow of $297.5 million on 17 August and a further inflow of $189.3 million on 18 August, totalling approximately $486.8 million for two days.

As at 19 August, the transaction price in bitcoin was approximately $64250, which was $63549 higher than the 11 August closing reference price used by VanEck, but still below the 200-day average.

Long-term holders are still declining.

According to VanEck, citing Glassnode data, long-term holders with currencies in excess of one year had a total of 356,534 BTCs reduced in 30 days, holding holdings down to 11,840,000, or 59.1 per cent of the supply in circulation.

Of these, the most significant decrease was in the number of addresses held between one and two years, with approximately 156,000 BTCs reduced; the number of older addresses held for more than 10 years decreased by only about 4,000, indicating that the early stages of a wallet as a whole were still relatively small.

VanEck mentioned that part of the movement of the currency may be related to the security adjustment of the wallet and not necessarily to the sale. The Agency referred to concerns raised by previous security incidents at Coldcard, but also indicated that this interpretation was more difficult to verify. If data on the flow of exchange flows by currency age are subsequently available, it will be easier for the market to judge whether these bitcoins flow to the trading platform or simply to transfer between private wallets.

According to VanEck, September to November will be the key window for this determination. If spot demand continues to pick up, turnover improves and long-term holders hold steady, the likelihood of bitcoin entering the build-up phase will increase; if long-term distribution continues or if there is a visible outflow from the Fund again, this judgement will be weakened.