Bitcoin is preparing for “transition phase” as parabolic growth looms, trader points out

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Bitcoin (BTC) is up 6% since the Fed cut US interest rates by 50 basis points. According to the trader known as Rekt Capital, this is the beginning of a “transitional phase” for Bitcoin to get started an upward parabolic movement.

The trader pointed out that it usually takes 161 days after the halving for Bitcoin to show action. In particular, the period between the halving and the expected bullish move is labeled by Rekt Capital as the “re-accumulation interval”.

If history repeats itself, BTC should burst of this restocking interval over the next few days, the trader added. Furthermore, Rekt Capital is particularly bullish after BTC recovered its re-accumulation range, preparing for the aforementioned transition phase.

Is Bitcoin Accelerating or Slowing Down?

However, the current bull cycle is different from the previous one, as Bitcoin hit a new all-time high before the halving.

Thus, Rekt Capital claimed to have accelerated the cycle, and periods of correction and consolidation were positive for slowing down and making this cycle similar to those of the past.

Despite all the brakes that Bitcoin has hit in this cycle, its acceleration rate is still ahead in about 70 days, Rekt Capital pointed out.

As a result, this one it is not clear to the trader if Bitcoin is preparing for further upward movement or if another correction will happen to reduce the acceleration rate further.

A perfect storm for risk assets

Although September is typically a bad month for risk assets, macroeconomic conditions show a “perfect setup” for risk assets, conformable to Tom Dunleavy, partner at MV Capital.

Dunleavy said the Fed has cut rates 12 times with the S&P 500 within 1 percent of its all-time high. In all these cases, the market was higher a year later, with an average return of nearly 15%.

In particular, ca reported by Bloomberg, Bitcoin’s correlation with the US stock market is near an all-time high.

“Markets are pricing in 250bps of rate cuts and 18% earnings growth over the next 12 months. Going through a period of this kind of growth has never been seen before. Most of the signals we would look for in the underlying economy are neutral to expansionary (the opposite of a recession),” Dunleavy added.

Finally, the partner at MV Capital said seasonality is extremely positive, with potential rallies in October and December.

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