BTC’s remarkable similarity to the past four-year market cycles enhances the prospect that the bottom has been reached, but on-chain data is required for confirmation.
Over the course of four years, we can see distinct bull and bear markets in Bitcoin’s price. A deeper examination of Bitcoin’s long-term price behaviour indicates that the run-up to prior cycles’ peaks and troughs is very similar. More fascinating is the fact that the 2020–2021 cycle seems to follow the same trend.
According to data compiled by HornHarris, an independent market analyst, the bottom-to-top and top-to-bottom periods have both been consistent since 2015.
It’s worth noting that the 2013 bear market lasted 58 weeks, leaving it just six weeks shorter than the previous two bear markets.
Bitcoin’s current rally is comparable to the one in 2019 when widespread negative investor sentiment was the key catalyst. The Bitcoin price increased by roughly 350% from the previous cycle’s low point of $3,125 and did not go below this level moving forward.
Four years later, situations have changed, but the market’s expectation of lower pricing owing to macroeconomic headwinds remains the fundamental cause of Bitcoin’s recent 30% price increase. The absence of a positive mood and accumulation of short positions in the futures market may have enabled purchasers to conduct a surprise rally to pursue short-order liquidations and induce FOMO among investors who had been on the sidelines.
However, not all circumstances are the same. Prior to Bitcoin’s price bottoming out, BTC whales – addresses owning more than 1,000 BTC — went on a purchasing run. However, these purchasers have not participated in the latest surge, which raises questions about its durability.
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.