Chart for BTC/USD (1W) Bitcoin (BTC) correction seems to have drawn to a close. The price has bottomed out during the last few months, but it is not about to skyrocket from here. Those who started trading in late 2017 might be anticipating similar gains as in last November and December. However, that does not appear to be the case. This time, Bitcoin (BTC) has completed one whole cycle. If we study Bitcoin (BTC)’s trading history for the past eight years, we will see that there are three segments of a Bitcoin (BTC) cycle. The first segment is smart accumulation. The second segment is dumb accumulation and the third segment is distribution. As Bitcoin (BTC) forms a bottom and prepares for a trend reversal, we now enter the smart accumulation period. This is where the smart money starts accumulating. The sentiment is against accumulation at this point. A lot of people still believe Bitcoin (BTC) could fall down to $4,000 or even lower. Unfortunately, they are so overwhelmed by fear and negative sentiment that it deters them from evaluating the risk/reward. Even if we do accept for a minute that Bitcoin (BTC) may fall to $4,000 from here that is still inconsequential in the grand scheme of things. All these institutional players would not be getting into Bitcoin (BTC) if they did not believe in its long term potential. Chart for BTC/USD (1M) At this point, the people following market developments are unlikely to be the ones with dumb money. They realize the importance of accumulating at this point because they know what has happened in the past. However, there are people who got late into the game, bought high and then sold low. They are not touching Bitcoin (BTC) until it falls below $4,000 or climbs above $20,000. That’s right; they will miss the rally and then buy when Bitcoin (BTC) rises above $20,000. Apparently, that is what they need in order to believe that Bitcoin (BTC) is not falling down to $4,000. Apart from them, there are those that are not yet touching Bitcoin (BTC) because they consider it a risky investment. These people will eventually get into the market, but by then the price would be ten times higher. The people with dumb money buy during the second period which is the dumb accumulation. This reminds me of a proverb that says, “Hard times create tough men, tough men create good times, good times create weak men, weak men create hard times”. Thus, the vicious cycle continues. The dumb money which enters late into the market is the first to panic when the rally slows down. However, they are not always the first to get out of the market. Smart money, gauging the intentions of dumb money, dumps on them and as a result dumb money ends up selling at lower prices. When all of it is over and the dust settles, a new cycle begins. As we see on the charts above, that cycle has already started. Smart money is going to buy, but unlike the dumb money, they are not jumpy. They are willing to wait it out. So, the smart accumulation is likely to extend till the end of the year which is why it is unlikely for the price to beat its previous all time high.