CRYPTO

Bitcoin’s price action in 2021 is a reflection of 2017 so far – will it last?


The recent rally in Bitcoin (BTC) has finally broken down to reach the widely expected new all-time high. With September far behind and high expectations for “Optobar”, many analysts are increasingly confident that the year will be the same as 2017.

In fact, the recent one Tweets Crypto analyst TechDev shows just how closely 2017’s price chart is tracking 2017, and it’s surprisingly close.

But can a constantly upward trajectory really be that simple?

Follow the index

Several parts of the data indicate similarities between the patterns in the two cycles. First, the Relative Strength Index, which traders use to identify over-buying and over-selling markets, is looking the same way as in 2017. In 2013 and 2017, each cycle showed two peaks, so if events follow, we still have one second left to assemble

TechDev’s ambitious prediction is that the $ 200,000 BTC value is “programmed.” Korean trader Mignolet is also energetic, saying in early October that the decline in volume from the spot to the derivatives market is a positive market signal. Meanwhile, even in September, some were sure that the BTC had reached the 100,000 mark even before the recent all-time high.

On-chain analytics firm Glassnode recently published a review of long-term huddling patterns, which gives more credibility to the argument for another assembly. The results show that coins held longer than the statistically significant period of 155 days only begin to enter the market when the price breaks the previous all-time high. On-chain patterns also currently show a trend towards savings.

Simply put, long-term holders are making sure that BTC supply exceeds demand.

However, not everyone agrees that history is repeating itself. When asked if he thinks 2021 is the mirror of 2017, Matthew Greenspan, founder and CEO of Quantum Economics, told the Quintelgraph “not at all”:

“2017 started with Bitcoin exceeding $ 1,000 per coin and gradually snowed throughout the year, constantly breaking new heights, which peaked in December. This year, we saw mass mania at the beginning of the year and then a warm expansion of that momentum. “

Backing up this view, other indicators are showing a more temporary relationship. In 2017, BTC’s dominance declined sharply in the first half of the year as it moved towards $ 20,000 resistance. The early 2021 shows a similar pattern and the dominance has been increasing since September. However, the direction of travel is still not controversially upward.

The same can be said for active addresses, which until 2017 were almost vertically upward trajectory. However, although the upward trend here is more pronounced than the dominance of BTC, it is still a mild trend.

Could it simply be that there is less eating frenzy for individual investors coming in 2021 than in 2017?

It probably seems. For example, there are some similarities with the last bull run pattern of net transfer on and off the exchange. Overall, however, markets are behaving in a more measured fashion.

Micha Benoliel, co-founder and CEO of Internet-of-Things Network Nodal, noted that there are macro-level differences between 2017 and now that could be responsible for these variations in pattern. Speaking to Cointelegraph, he said the situation was completely different:

“The Covid crisis has hit many of our economies, and the amount of money printed by the central bank to support our economy has reached new heights. Inflation is rising, and therefore, Bitcoin is a safe place to hedge against what is happening. “

So, what can be expected from BTC?

Regardless of whether the present is reflecting the past by all measures, analysts said Bitcoin prices were almost universally bullish even before this week’s Starler Price Action.

TechDev’s $ 200,000 forecast is at the high end of most forecasts, while analyst PhilphFilb put the price at $ 72,000 by November.

And then there’s consistently reliable PlanB. The creators of the stock-to-flow model for Bitcoin have brought the price of the last two monthly closures to a fraction of one percent and forecast $ 63,000 and $ 98,000 in October for November. He advised BTC to reach $ 135,000 by December – as he did not Indicates, Based on its popular stock-to-flow model. If it was 100% accurate, the BTC would have already reached the 100,000 mark, according to him.

Instead, the crowd seems to be expecting analysts to release details of a new price and / or on-chain data model that drives these terribly accurate monthly price forecasts.

How long can it last?

The 2017 race peaked in December when bullish sentiment ended at around $ 20,000. Although the low breakout in early January brought new hope, it was a descent from there.

It is also worth noting that the last big BTC bull race before that was in 2013 when the price peaks came a few weeks earlier in late November and early December. Again, the high is followed by another rally in early January.

If history repeats itself, December could mark the point where the market will enter a new phase of this half-cycle. PlanB believes it will last for a long time, though, based on its unpublished on-chain model.

Of course, publishing metrics and models cannot take into account news or other market events that could affect prices. So far this year, Bitcoin has suffered multiple regulatory blows from the enmity of the Chinese government and Elon Musk for being a legal tender in El Salvador and gaining widespread recognition from the financial sector and institutions. A stagnant economy and investor interest in the market-beat yield of crypto have also helped maintain a strong support level.

Related: Crypto broke Wall Street’s ETF barrier: a waterlogged moment or a stopgap?

Although Bitcoin Exchange-Traded Fund (ETF) news is currently taking the market to the epic bull zone, there is no cast-iron guarantee that positive sentiment will drive the market. The ongoing story of potential U.S. regulatory intervention and a growing heated energy crisis that could seem to have an impact on mining profits – these or other macroeconomic factors could certainly blow up the market.

Currency.com CEO Steven Gregory believes that if the current ETF hype is not similar, calling for similar sentiments in 2017, telling Cointelegraph that when the first Bitcoin futures deal was added to the CBOE, there was widespread excitement: “Initially, A strong upward price movement, but looking back, it looks like the end of a bull race for BTC. “

“There could be some parallels between the 2017 bull race and this 2021 cycle; However, adoption is much higher, open interest is higher, and the usefulness of crypto is much higher than in 2017. “

While this does not guarantee results, the bullish feeling seems to be irresistibly strong at this point. Either way, 2021 is set to go down in the history books as the most action-packed in the history of crypto history.