Bitcoin’s (BTC) recent rally has finally broken through to reach widely anticipated new all-time highs. With September being left behind and “Uptob
Bitcoin’s (BTC) recent rally has finally broken through to reach widely anticipated new all-time highs. With September being left behind and “Uptober” delivering on high hopes, many analysts are increasingly confident that the year will play out in the same way as 2017.
In fact, a recent tweet from crypto analyst TechDev shows just how closely the price chart for 2021 is tracking 2017, and it’s startlingly close.
But can a continuing upward trajectory really be that simple?
Following the indicators
Several pieces of data point to similarities in the patterns between the two cycles. Firstly, the relative strength index, which traders use to identify overbought and oversold markets, is tracing the same path as 2017. In 2013 and 2017, each cycle displayed two peaks, so if events follow course, then we’re still due a second rally.
TechDev’s ambitious prediction is that a $200,000 BTC price is “programmed in.” Korean trader Mignolet is also bullish, stating in early October that the decrease of volume moving from spot to derivatives markets is a positive market signal. Meanwhile, even back in September, some were sure about BTC reaching the $100,000 mark even before the recent all-time highs.
On-chain analytics firm Glassnode recently published a review of long-term hodling patterns, which provides further credence to the argument for another rally to come. The results demonstrate that coins held longer than a statistically significant period of 155 days only begin to enter the markets once prices break the previous all-time high. On-chain patterns also currently show a trend toward accumulation.
Put simply, long-term holders are ensuring that demand for BTC outstrips supply.
However, not everyone agrees that history is repeating itself. When we asked whether he thinks 2021 is a mirror of 2017, Mati Greenspan, founder and CEO of Quantum Economics, told Cointelegraph “Not at all,” adding further:
“2017 began with Bitcoin crossing $1,000 per coin and gradually snowballed throughout the course of the year, continuously breaking new highs, a crescendo that peaked in December. This year, we saw the mass mania at the beginning of the year and then a lukewarm extension of that momentum.”
Backing up this view, other indicators are showing a more tentative correlation. In 2017, BTC’s dominance dropped sharply during the first half of the year before picking up as it moved toward the $20,000 resistance. Early 2021 showed a similar pattern, and dominance has been increasing since September. However, the direction of travel isn’t yet incontrovertibly upward.
The same can be said of active addresses, which by this point in 2017 had been on a near-vertical upward trajectory. However, while the upward trend here is more pronounced than BTC’s dominance, it’s nevertheless on a gentler incline.
Could it simply be that 2021 is less of a feeding frenzy for incoming individual investors than in 2017?
It seems likely. For instance, net transfer to and from exchanges has some similarities to the patterns of the last bull run. But overall, the markets are behaving in a more measured fashion.
Micha Benoliel, co-founder and CEO of Internet-of-Things network Nodle, points out that there are macro-level differences between 2017 and now that could account for these variations in pattern. Speaking to Cointelegraph, he said that the situation is totally different:
“The COVID crisis has hit many of our economies, and the level of money printed by central banks to provide support to our economies has reached new highs. Inflation rates are growing, and therefore, Bitcoin is a safe position to hedge against what’s happening.”
So, what can be expected from BTC?
Regardless of whether the present is mirroring the past by all measures, analysts have been almost universally bullish on Bitcoin’s price even before this week’s stellar price action.
TechDev’s $200,000 prediction is at the higher end of most forecasts, while analyst Filbfilb put prices at $72,000 by November.
And then there’s the consistently reliable PlanB. The creator of the stock-to-flow model for Bitcoin has nailed the last two monthly closing prices to within a fraction of a percent and has predicted an October close of $63,000 and $98,000 for November. He also tips BTC to have reached $135,000 by December — not, as he points out, based on his popular stock-to-flow model. If that were 100% accurate, BTC would have already hit the $100,000 mark, according to him.
Instead, it seems that the crowd can expect the analyst to reveal details of a new price and/or on-chain data model that’s driving these scarily accurate monthly price predictions.
How long can it last?
The 2017 run peaked in December when bullish sentiments ran out at almost $20,000. Although a lesser breakout in early January brought fresh hopes, it was downhill from there.
It’s also worth noting that the last big BTC bull run before that was in 2013 when the price peak came a…
cointelegraph.com