Bitcoin [BTC] Officially Enters Wyckoff Phase E—Golden Cross Sets the Stage for Next Market Cycle

Bitcoin [BTC] officially entered Phase E of the Wyckoff Accumulation model—typically marked by a breakout and strong upward continuation.

Bitcoin (BTC) price has officially entered Phase E of the Wyckoff Accumulation model, typically marked by a breakout and strong upward continuation. One key technical confirmation was witnessed on the 24th of May, when the 50-day Moving Average (MA) crossed over the 200-day MA, forming the ‘golden cross’.

The chart pattern is traditionally considered a bullish long-term signal. It usually indicates a shift in sentiment.

Naturally, many traders have now set their sights on the $125K mark—the first major resistance within this markup phase.

Source: X

The real question remains—what happens beyond that?

U.S. Senate crypto bills could initiate the next market phase

From a highly regarded market analyst’s tweet, the next cycle for Bitcoin could either be a distribution phase or a re-accumulation phase.

The likeliest, in his view, is re-accumulation, particularly with the U.S. Senate set to vote on key crypto legislation soon.

Of course, regulatory events inject volatility. But they could also support institutional confidence, especially if legal clarity emerges around digital asset classifications.

Addresses withdrawing Bitcoin are declining

On-chain metrics add fuel to the current rally.

The declining number of Exchange Withdrawing Transactions—a key indicator tracking how often BTC is moved to private wallets, suggested selling pressure may be dwindling.

Picking up on the decline, the resulting fade in selling pressure may act as a stealthy bullish driver, reducing overhead resistance and powering price momentum.

This pattern aligns with the analyst’s projection of a distribution move near $260K by August or September, assuming market supply remains constrained.

Source: CryptoQuant

As Bitcoin continues to heat up with new highs and a ‘golden cross’, the potential for the cryptocurrency to continue rallying despite reaching new highs is in sight.

However, with the 50-day MA now crossed over the 200-day MA, it may be setting up the 200-day MA to cross back over the 50-day MA. Such a scenario may unfold if the price experiences a pullback or consolidation.

This could lead to a bearish triple-divergence pattern on the lower time frames, potentially setting the stage for further downside movement.

The implication is that if the 200-day MA crosses over the 50-day MA, it could be setting up for a lower low on the 4-hour chart.

Moreover, if the price drops below the 50-day MA, it may continue to fall until it reaches the 200-day MA, setting up the 200-day MA to cross over the 50-day MA again.

This pattern is commonly observed during market tops or during transitions from bullish to bearish trends.

The potential for a bearish triple-divergence pattern arises as the lower lows in price may be setting up three bottoms on the 4-hour chart, especially if the price drops below the 50-day MA and continues to fall from there.

This, in particular, may be setting up the 200-day MA to cross over the 50-day MA, especially if the price drops below the 50-day MA and continues to fall until it reaches the 200-day MA.

This pattern is commonly seen during market tops or during transitions from bullish to bearish trends.

The implication is that if the 200-day MA crosses over the 50-day MA, it may be setting up for a lower low on the 4-hour chart.

If the scenario plays out as planned, it could open the door for the price to continue falling until it reaches the Fib level of 0.382 at $96K.

If the Fib level holds, it may set the stage for another rally in price, potentially leading to the final wave of the cycle.

On the other hand, if the Fib level fails to hold and the price continues to fall, it may signal the beginning of a new bear market.

The crucial aspect to keep in mind is that if the price drops below the 50-day MA, it may continue to fall until it reaches the 200-day MA, setting up the 200-day MA to cross over the 50-day MA again.

This pattern is commonly seen during market tops or during transitions from bullish to bearish trends.