Why Bitcoin Is Bottoming At $2850 To Eventually Rally To $333k
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Alright guys, we know that this subject was a bit of a clickbait. But to be straight forward, we really wanted you to read our exercise and why we believe we’re closer to find a bottom. So let’s do this.
We have been working on a simple hypothetical exercise that analyses two market cycles. First market cycle is from 2014 bull run to bottom and reversal. Second market cycle is from the moment Bitcoin price reached ~19,900 until today and the near future.
The goal of this exercise is to predict where Bitcoin price is going, how many bear market days we have left and what the next big bull run can look like.
We are assuming that we will follow exactly what the last cycle did, a scenario that is somehow unrealistic, but it’s one of the best ways we can find guidance and, most importantly, perspective. For the purpose of this exercise we used the monthly chart.
First Market Cycle (From November 2013 to March 2017–1216 days)
https://www.tradingview.com/x/Y6xok3CA/
We decided to analyse the previous market cycle, starting with all time high on November 2013. At that time Mt. Gox was dealing with +70% of the Bitcoin transactions and price reached $1182.
Conclusions:
- That huge bull market started to retrace harshly when Mt. Gox halted all Bitcoin withdrawals, on February 2014
- This bear market took around 426 days to reach a bottom on January 2015
- In 2015 we started a 243 sideways period, with one last and weaker wick to $162 again that was followed by the beginning of the bull market
- On February 2015, Tether trading starts right when the sideways market began. We are mentioning Tether because they’re under investigation from the SEC due to market manipulation allegations during the last bull market
- On July 2016, Bitcoin reward went from 25 BTC to 12.5 BTC per block. Many theories say that this was one of the reasons why Bitcoin price boosted.
- It took the market 547 days to recover and fully reverse and break previous ATH of $1182 on February 2017
Second Market Cycle (From March 2017 to January 2022–1525 days)
https://www.tradingview.com/x/BwS6lOwu/
To analyse our current market cycle we used the exact same bars from the previous market cycle. Again, we know this is not realistic and that prices, volatility, supports and resistances will not be the same. But it gives us the most important thing we are looking for: perspective.
Conclusions of this hypothetical approach:
- Bull run to ~19,900 started on March 2017 and it took only 275 days to reach ATH
- In other words, in just 9 months we went from breaking previous ATH at $1182 to $19,900
- If we compare to previous market cycle a -86% retrace would take us to $2850. We already touched $4000 and there are more developments that can take us there (Example: possible SEC’s subpoena to Bitfinex and Tether)
- Comparing to previous market cycle, we have 3 months left of bear market and can reach the bottom in February 2019
- Spring will bring us sideways movement that can last until October 2019, month that will mark the beginning of the reversal
- A new Bitcoin reward halving from 12.5 to 6.25 will help us recover and march towards previous ATH
- This market will be bullish for 548 days and reach previous all time high in April 2021. Yes, it will take more than two years to reach $19,900 again.
- Now this gets interesting and fully hypothetical. After reaching previous ATH, it would then be followed by 9 months of full parabolic growth that will take Bitcoin to $330,000 in January 2022
Possible doomsday and bull run catalysts
Last but not least, it’s important to reflect on possible catalysts for these price movements.
On the bear side we have possible SEC subpoena to Bitfinex because of Tether manipulation, which will affect all tether exchanges and will contaminate the rest of the market.
On the bull side, strong possible catalysts are the ETFs’ approval and a good performance of Bakkt platform.
Important:
- 2014 market was totally different from 2018 market. Things go faster now, so it’s highly unprovable it will take so long to reach previous ATH
- If Bitcoin doesn’t find it’s bottom at $2900, we will be entering in a no mans land and can easily test the ATH of the 2014 market cycle, which would be, to say the least, chaotic to interpret
- Some values may not be 100% accurate and may include small deviations
- This is not investment advice, just a fun exercise
Invite: please add your comments in Coinvision’s private community.
