Bitcoin is still the most popular cryptocurrency, but it’s price has fallen by more than half since last year. Bitcoin owners are optimistic about its future though; Bitcoin is almost universally expected to make a big comeback in 2021 with growth similar to that of 2017
In the last two years, Bitcoin has been a rollercoaster. In 2017, prices skyrocketed from just under $1k to almost $20k in December of that year before crashing back down below $5k. In 2018 it’s been a little different as we slowly creep up toward the valuation again around about US$6-7K for each BTC on average with some occasional spikes and crashes along the way. However, one thing is certain; no matter what happens next year or beyond – whether things go relatively stagnant like they have done so far this year (again) or if more extreme price action will emerge — bitcoins are here to stay. They’re not going anywhere anytime soon and there’s still plenty of room left for growth!
Bitcoin is a digital currency that has been growing in popularity over the last few years. Bitcoin’s price action in 2021 so far mirrors 2017 — Will it continue?
Bitcoin’s (BTC) recent climb has finally broken through to fresh all-time highs, which had been widely expected. With September behind us and “Uptober” delivering on high expectations, many experts are becoming more optimistic that 2018 will follow in the footsteps of 2017.
Indeed, a recent tweet from crypto researcher TechDev demonstrates how closely the price chart for 2021 resembles that of 2017, and it’s astonishingly similar.
But is it really so easy to maintain a positive trend?
Observe the indications
Several pieces of evidence suggest that the two cycles’ patterns are similar. To begin with, the relative strength index, which traders use to spot overbought and oversold markets, is following in the footsteps of 2017. Each cycle had two peaks in 2013 and 2017, so we’re still due for a second rally if things go according to plan.
A $200,000 BTC price is “built in,” according to TechDev’s bold estimate. Mignolet, a Korean trader, is similarly upbeat, claiming in early October that the shift in volume from spot to futures markets is a favorable market indicator. Meanwhile, even before the latest all-time highs, some predicted that Bitcoin would surpass $100,000 in September.
Glassnode, an on-chain analytics business, recently released an analysis of long-term hodling trends, adding weight to the case for another surge. The findings show that coins kept for more than a statistically significant duration of 155 days only join the market after values have surpassed the previous all-time high. On-chain patterns are also now showing an accumulating tendency.
Simply put, long-term investors ensure that demand for BTC exceeds supply.
Not everyone, though, believes history is repeating itself. When asked whether he believes 2021 would be a repeat of 2017, Mati Greenspan, the founder and CEO of Quantum Economics, said, “Not at all,” adding, “
“Bitcoin crossed $1,000 per coin in January 2017, and it progressively snowballed throughout the year, always hitting new highs, culminating in a crescendo in December.” We had widespread hysteria at the start of the year, followed by a tepid extension of that momentum.”
Other measures, which support this viewpoint, reveal a more tenuous association. In 2017, BTC’s dominance dipped dramatically in the first half of the year before rebounding as it approached the $20,000 barrier level. Early in 2021, a similar trend emerged, and since September, dominance has been growing. However, the path of motion is not yet unmistakably upward.
The same can be true for active addresses, which had been on a near-vertical rise trend by this time in 2017. While the increasing tendency is more evident than BTC’s domination, it is still on a more gradual upward trajectory.
Is it possible that in 2021 there will be less of a feeding frenzy for entering individual investors than there was in 2017?
It seems to be the case. Net transfer to and from exchanges, for example, resembles the trends of the last bull run. The markets, on the other hand, are responding in a more methodical manner.
There are macro-level variances between 2017 and today, according to Micha Benoliel, co-founder and CEO of Internet-of-Things network Nodle, that might explain for these pattern deviations. He told Cointelegraph that the scenario is very different:
“Many of our economies have been impacted by the COVID crisis, and the amount of money issued by central banks to assist them has reached new highs. Inflation rates are rising, and Bitcoin is a secure bet to protect against this.”
So, what should you anticipate from BTC?
Even before this week’s amazing price movement, experts were virtually unanimously positive on Bitcoin’s price, regardless of whether the present is mimicking the past in every way.
Most projections put costs at $72,000 by November, but TechDev’s prediction of $200,000 is on the high end of the range.
Then there’s PlanB, which is always dependable. The inventor of the Bitcoin stock-to-flow model has projected an October closure of $63,000 and a November close of $98,000 to within a fraction of a percent of the previous two monthly closing values. He also expects BTC to hit $135,000 by December, despite the fact that this is not based on his famous stock-to-flow model, as he points out. According to him, if it were 100 percent correct, BTC would have already surpassed the $100,000 threshold.
Instead, it seems that the analyst will publish the specifics of a new pricing and/or on-chain data methodology that is generating these frighteningly precise monthly price forecasts.
How long do you think it’ll last?
Bullish sentiment crested in December at about $20,000, bringing the 2017 run to a close. Although a smaller breakthrough in early January sparked new optimism, everything went worse after that.
It’s also worth remembering that the last major BTC bull run occurred in 2013, with the price top occurring a few weeks earlier at the end of November and the beginning of December. In early January, the peak was followed by another rise.
If history repeats itself, December might be the start of a new phase in the market’s halving cycle. PlanB, based on his unknown on-chain model, thinks it will last longer.
Of course, measurements and models can’t account for breaking news or other market occurrences that may have an impact on pricing. Bitcoin has survived repeated regulatory blows from the Chinese government and Elon Musk’s antics so far this year, as well as the boost of becoming legal money in El Salvador and obtaining greater acceptance from the financial industry and institutions. A stagnant economy and investor interest in cryptocurrency’s market-beating payouts have also contributed to the currency’s strong support.
Related: Crypto overcomes the ETF barrier on Wall Street: A watershed event or a stopgap?
While the announcement of the Bitcoin exchange-traded fund (ETF) has propelled the markets into epic bull territory for the time being, there are no assurances that good emotion will continue to drive the markets. There’s also the continuing drama of prospective US regulatory action, as well as an intensifying energy crisis that seems to be affecting mining profitability – these, as well as other macroeconomic issues, might throw the markets off track.
The current ETF hype, according to Steven Gregory, CEO of Currency.com, evokes similar, if not identical, feelings to those experienced in 2017, when the first Bitcoin futures contract was added to CBOE: “Initially, there was a strong upward price movement, but looking back, it looked like the tail end of the bull run for BTC.” However, he advises against bundling up for the coming crypto winter, explaining:
“There are certain similarities between the 2017 bull run and this 2021 cycle; but, adoption is significantly bigger, open interest is higher, and crypto’s usefulness is unrecognizably farther ahead than in 2017.”
Bullish feelings seem to be extremely strong at this moment, despite the fact that this does not guarantee the outcome. Whatever happens, the year 2021 will go down in crypto history as one of the most eventful in the industry’s colorful history.
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