BTC’s uncanny resemblance to the past two market cycles raises the possibility that the bottom may be in, but full confirmation depends on the series’ data
The price has followed a four-year cycle, with consistent bull and bear trends at some measured intervals. A closer look at Bitcoin’s long-term price action shows that the up and down runs of the previous cycle look remarkably similar. What’s more interesting is that the 2020-2021 cycle shows signs of following suit in a similar fashion.
Independent market analyst HornHarris found that the period from bottom to top to top bottom remained the same from 2015: 152 weeks and 52 weeks, respectively
The bear market in 2013 also lasted 58 weeks, a difference of only six weeks compared to the other two cycles.
Bitcoin price chart with previous cycle timeline. Source: Twitter
Another similarity from previous bottom formations is the similarity between Bitcoin’s current boom and 2019, when the primary catalyst prevailed Negative investor sentiment Bitcoin price rose nearly 350% from the $3,125 low, not falling below this level going forward , marking the bottom of the previous cycle
Four years later, things have changed, but the underlying reason for Bitcoin’s latest 30% price rise was still that buyers expected lower market prices due to macroeconomic headwinds lack of positive sentiment in futures markets and building up short positions In the middle of a number -trust meeting, they could induce FOMO — the fear of missing out
But not all situations are the same. Earlier, there was a buying spree of BTC whales — addresses with more than 1,000 BTC — as bitcoin prices began to plummet. However, these buyers did not participate in recent meetings, raising concerns about its sustainability.
If history repeats itself, Bitcoin’s November 2022 low of around $15,500 will mark the current cycle bottom. It would also mean that a new bullish cycle has begun, and the asset could record a new peak in October 2025.
Number of addresses with more than 1000 BTC. Source: Glassnode
It will be interesting to see if whale buyers buy the Federal Reserve’s theory under Jerome Powell that December’s consumer price inflation and jobs economic data showed early signs of a rather successful soft as a result of a flight against inflation The landing was attracted by the recession. Some of the other indicators in the series may help confirm whether this bull run is the real deal.
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There are signs of a short-term bullish reversal
Bitcoin has been trading around bargain buying levels for a long time. In the short term, however, selling pressure from miners, macroeconomic headwinds and fears of a FTX transition were more likely to push prices to new lows Recent rallies suggest the series signal is moving into bullish territory.
Bitcoin’s realized price metric reflects the average price of buyer transfers in a range of currencies. In the past eight years, its value has fallen only three times below its realized value. Furthermore, fractures above this level signaled the end of the slow trend in each of these.
Currently, the realized value of Bitcoin sits at $19,715. If prices remain above this level, this will encourage buyers on the sidelines to attend the meeting.
Bitcoin’s on-chain realized price (yellow) and market price (black). Source: Glassnode
Another reliable short-run series indicator is the cost output profit ratio (SOPR). It measures the profitability of bitcoin transactions based on the value of tokens when they are added to and withdrawn from specific addresses.
The indicator is used to identify bullish and bearish trends. When prices are in an uptrend, investors increase their winning positions during pullbacks, which is indicated when the price of the SOPR indicator stays above one In bears, the opposite is true: dominate the market by selling on bear rallies It happens. Thus, the crossover of the metric at the pivot is a powerful trend reversal signal.
So far, the seven-day average transaction is still a loss, but prices are much closer to a rapid decline. Based on the last revision of SOPR’s pivot, a bullish reversal would follow a successful weekly close above $21,200.
Admission: Adjusted SOPR. Source: Glassnode
Another notable development occurred with Bitcoin miners, one of the most important sellers in 2022, as the market price of Bitcoin fell below the production cost, creating pressure on it but it on the day of the miners’ surrender It may be behind.
The hash ribbon indicator, developed by on-chain analyst Charles Edwards, was flashing buy signals, indicating the end of the falling trend