Bitcoin is having a ride. First, we went from $6,850 on Jan. 3rd to $8,500 on Jan. 8th. But then yesterday, we went down again, falling to about $7,650 level. But even that didn’t last long.
We started moving upwards yet again and are currently sitting above $8,000. At the time of writing, BTC/USD has been trading at $8,080 with 24 hours gains of 2.20%, as per Coincodex.
Another positive thing is the strong volume. Before Bitcoin started showing signs of life, the top exchanges with real volume recorded less than $200 million. But for the past few days, we have been keeping above $1 billion. 2020 actually saw an increase of more than 120% in trading volume.
Bitcoin getting Ready for another Europhic Ride
Now that Bitcoin is looking lively and strong, Crypto Twitter has turned bullish as well. Crypto trader Murad Mahmudov of Adaptive Fund also shared a positive analysis that could mean another bull run like that of 2019 is coming.
Bitcoin’s drop from 2019 high hit in June to $6,410 in mid-December according to him was just a correction instead of a full out bitcoin bear market. Mahmudov explained,
“In my view, this isn’t going to the Weekly 200 MA, because, as crazy as it sounds, the -53% drop from $13888 to $6410 wasn’t a full out bitcoin bear market, but rather, unironically just mid-bullcycle correction.”
— Murad Mahmudov ? (@MustStopMurad) January 10, 2020
A widely used indicator in technical analysis, a moving average (MA) is a trend following indicator as it is based on past prices. The 200-day Moving Average is a long-term following indicator that can be used as a trend filter.
A Dash of Fear in the form of Uncanny Resemblance
However, amidst this hopium thrown in by Mahmudov, one chart that has the uncanny resemblance with the current market from 2018 to now is of 2013-2015.
After the bull market of 2013, BTC price bottomed in the first half of 2014. For the next few months, BTC price climbed upwards only to hit a new low in early 2015. As per this, Bitcoin’s price could hit a new low, below $1,000 in April 2021.
I don’t insist.
Moreover, I think it is very unlikely to happen.
But don’t deny that there is a resemblance.
Even the time scale is expanded, just as it is expected for the increased capitalization. $BTC $BTCUSD #bitcoin pic.twitter.com/r1FqoQ1zLQ
— CryptoHamster (@CryptoHamsterIO) January 10, 2020
However, what 2013-2015 market didn’t have but this cycle has is the Bitcoin reward halving scheduled in May 2020.
The first reward halving was in November 2012 that was followed by the 2013 bull run. The second reward halving then occurred in July 2016 which then followed by the 2017 bull run that topped out in December at $20,000.
And although traders like Peter Brandt and Jacob Canfield among others are still calling for a big drop around halving, it isn’t below $5,000.
Apart from the halving, what would be interesting to see is the low BTC would be putting in 2020, that has been a higher one that the bottom put in the previous year in almost every year for the past 11 years, after $3,232 in 2018 and $3,385 in 2019.