Bitcoin price action in 2021 so far mirrors 2017 — Will it continue?
According to trade analysts, bitcoin is in full bullish mode as the indicators in the chain look promising, but the rest of 2021 may be full of surprises.
Recently, the bitcoin (BTC) rally has finally exploded and reached new long-awaited records. Given that September is lagging behind, and October has high hopes, many analysts are increasingly confident that this year will be the same as in 2017.
In fact, a new tweet from cryptanalyst TECHDEV shows how accurately the 2021 price chart tracks 2017, and it’s surprisingly close.
But can a continuous upward trajectory really be that simple?
Several pieces of data show similarities in the decors between these two cycles. Firstly, the relative strength index used by traders to determine overbought and oversold markets is following the same path as in 2017. In 2013 and 2017, each cycle showed two peaks, so if events go in turn, we will still have a second rally.
Techdev’s ambitious forecast is that the $200,000 BTC price is “programmed,” Korean trader Mignole said, also optimistically stating that the decline in volume moving from spot markets to derivatives in early October is a positive market signal. Meanwhile, in September, some were confident that BTC would reach $100,000 even before the recent decadents.
Recently, the online analytical firm Glassnode published a review of long-term Hodling models, which further confirmed the arguments of the next rally. The results show that coins held for more than 155 days statistically significant began to enter the markets only after prices exceeded the previous record level. The models in the chain also currently tend to accumulate.
Simply put, long-term owners guarantee that the demand for BTC will exceed the supply.
But not everyone agrees that history repeats itself. When we asked if he thinks 2021 is a mirror of 2017, Mati Greenspan, founder and CEO of Quantum Economics, told Cointelegraph: “Not at all.”:
“2017 started with bitcoin rising above $1,000 per coin and gradually rising over the course of the year to break new highs, constantly reaching its peak in December, a crescendo. At the beginning of this year, we saw a massive mania, followed by a slight expansion of this momentum,” he said.
Reinforcing this point of view, other indicators show a coarser correlation. In 2017, BTC dominance plummeted in the first half of the year before it grew as the $20,000 resistance approached. A similar pattern was observed in early 2021, and dominance has been growing since September.
The same can be said about active addresses, which until this moment in 2017 were in an almost vertical ascending orbit. However, although the bullish trend here is more pronounced than the dominance of BTC, it is still on a lighter slope.
Is it possible that only 2021 will become less crazy for individual investors to launch than in 2017?
It seems likely. For example, net transfers to exchanges and exchanges have some similarities with the models of the last bull race in July. But in general, the markets behave more restrained.
Misha Benoliel, co-founder and Chief Executive Officer of the Internet of Things network, notes that there are macro-level differences between 2017 and decadent day, which may explain these differences in structure. Speaking to Cointelegraph, he said that the situation is completely different:
So, what can we expect from BTC?
“The COVID crisis has hit most of our economies, and the level of money supplied by central banks to support our economies has reached new heights. The rate of inflation is rising, and therefore Bitcoin is a safe place to hedge what is happening.”
Whether or not the past is reflected in every way, analysts were almost universally optimistic about bitcoin’s price even before this week’s stellar price movement.
While Techdev’s forecast was higher than most forecasts by $200,000, analyst Filbfilb raised prices to $72,000 by November.
And there is always a reliable PlanB. In November of October, the creator of the “from stocks to flow” model for Bitcoin accurately determined the closing price for the last two months by one percentage point and predicted a close at $63,000 in October and $98,000 in November. He also reports that it will reach $135,000 by December, as BTC notes, based on the popular “from stocks to flow” model. According to him, if this were 100% true, BTC would have already reached the $100,000 mark.
Instead, it seems that the crowd can expect the analyst to reveal the details of the new price model and/or network data that drives these frighteningly accurate monthly price forecasts.
How long can this go on?
2017 reached its peak when the bullish trend declined by about $20,000 in December. Although a smaller breakthrough in early January brought new hopes, from that moment everything fell apart.
It is also worth noting that the last major bullish run of BTC before that was in 2013, when the price peak fell a few weeks earlier than in late November and early December. Again, the summit was followed by another rally in early January.
If history really repeats itself, December may mark the moment when the market enters a new phase of this halving cycle. Planb believes it will last longer based on an undisclosed chain model.
Of course, indicators and models cannot take into account emerging news or other market events that may affect prices. So far this year, Bitcoin has been based on becoming legal tender in El Salvador, as well as gaining wider acceptance from the financial sector and institutions, as well as numerous regulatory coups from the antics of the Chinese government and Elon Musk and becoming legal tender in El Salvador. The stagnant economy and investor interest in the profitability of cryptocurrencies exceeding the market value also helped to maintain a stable level of support.
Related: Crypto Breaks the Wall Street Etf Barrier: A Tipping Point or a Temporary Stop?
While the news about the bitcoin exchange-traded fund (ETF) is currently pushing the markets into an epic bullish zone, there is no concrete guarantee that positive emotions will continue to drive the markets. There is an ongoing epic about potential US regulatory intervention and a growing energy crisis that could affect the profitability of the mining industry – certain macroeconomic factors could disrupt markets.
Stephen Gregory, CEO Currency.com . While the current hype around the ETF, in his opinion, caused similar sentiments, if not similar to 2017, there was widespread excitement when the first bitcoin futures contract was added to the CBOE, telling Cointelegraph: “Initially there was a strong price action, but looking back, it seemed to be the end of the bullish trend for BTC.” However, he warns of the end of the cold of the new crypto and clarifies:
“There may be some parallels here between the 2017 bull run and this 2021 cycle; however, adoption is much broader, clear interest is higher, and the utility of cryptography has been deconstructed beyond recognition since 2017.”
Although this does not guarantee a result, the bullish trend now looks extremely strong. In any case, 2021 will go down in the textbooks on the history of cryptography as one of the busiest events in the colorful history of the industry.