Bull market coming early? A comprehensive comparison of Bitcoin trends in 2020 and 2017

Original title: BTC breaks through $17,000 without resistance, a possible new high for BTC in 2021

BTC does it again. The more you wait for it to pull back, the more it will rise.

Little Bee wrote a paragraph a few days ago:

TVB: Why can’t I find the resistance level?

BTC: Resistance? Whoever stands in my way will die!

As expected, BTC soared and reached $17,000 effortlessly.

The Air Force was badly defeated.

❖Similar history❖

➤ 2020 vs 2017

I observed the trend of BTC today and found that this year's BTC is very similar to that of 2017, except for the first three months.

Take a look at this picture on coinmarketcap:

In 2017, BTC had two peaks, and then it almost kept going up.

There was a pullback in the meantime. If we look at the time from 2016 to the present, we can see this pullback more clearly. In the blue box on the graph, the pullback was a sharp drop and then a rapid rebound, and then it almost went all the way up.

This year, there have been two peaks after the halving, and now it is almost in a resistance-free state, going up all the way.

Therefore, the big bull market that we originally expected in 2021 may happen this year.

➤Bull market coming early?

There are naturally certain reasons for the early start of the bull market.

The bull market in 2017 was mainly due to the psychological expectations of investors and speculators, which instantly created a price bubble for BTC. The bubble rose quickly and burst quickly. In 2018, BTC fell almost all the way until the end of the year, when the BCH and BSV fork computing power war catalyzed BTC to $3,000.

However, 2020 is different.

First, in 2016, not many people knew about BTC, and even fewer dared to buy it. Xiao Feng knew about BTC when it was only 20 yuan, but he didn’t dare to buy it. Of course, even if he bought it, he probably wouldn’t have sold it now.

However, 2020 is different. In 2020, more people are confident in BTC, and they also understand the 4-year cycle. Since they know that 2021 is a big bull market, they can’t wait until 2021 to buy BTC! BTC was very calm before the halving in 2016, but it rose sharply in February 2020. Therefore, people started buying BTC before the expected big bull market came, that is, in 2020, thus advancing the BTC bull market.

Second, in 2020, it is no longer a bunch of retail investors who are going crazy, nor are there only the big guys who are making profits.

Grayscale, Microstratery, Paypal, Square, and JPMorgan Chase are all institutional investors in BTC.

There are obvious differences between institutional investors and retail investors: on the one hand, institutional investors’ investments are all professionally analyzed and judged. They will not only analyze the investment price of BTC from a financial perspective, but will also look at its code to understand its value. On the other hand, institutional investors are unlikely to speculate in the short term, and they will hold on for a relatively longer period of time.

Some people jokingly call Grayscale the Pi Xiu of the cryptocurrency circle because Grayscale has been buying and buying recently and hoarding the assets without selling them.

Third, if the bull market comes early, there is another reason, which is also the reason why institutions invest in BTC and LTC, that is, risk aversion. After all, the global fiat currency is released, and gold may have a bubble under the influence of risk aversion. On the other hand, we should understand that BTC should have more room for growth than gold. Of course, investment institutions should have already allocated gold. They need other assets besides gold, securities, and foreign exchange to enrich their investment structure, so as to have the possibility of obtaining more returns. Therefore, BTC and LTC have become the choice of institutions.

In summary: Market expectations and institutional investors are micro reasons; global fiat money injection is a macro reason and one of the reasons why institutional investors invest in cryptocurrencies. These factors have led to a sharp rise in BTC in 2020, which may advance the bull market ahead of schedule.

❖Historical Comparison❖

➤ Two possible trends

The question now is, there are two possible trends that BTC may take next.

The first is that 2020 will really repeat 2017 and reach a new high by the end of the year.

The second possibility is that since people have greater expectations in 2021, the market will come to an abrupt halt after rising to a certain height in 2020, start to pull back, and then restart its rise in 2021.

The first one is that the market will go crazy this year, and the second one is that the market will adjust this year and continue to go crazy next year. Of course, some friends think there will be other possibilities.

If there is a third possibility, it is that the market will continue to go crazy from this year to next year. This possibility is not very high, because if the current trend is almost vertical, it will continue until next year. This possibility is not very high, because if BTC is unlikely to only rise and not fall, when the rise slows down, especially when it goes sideways, the dealer will always cash out, cut off some timid people, and then start the next round of pull-ups. So it is possible to continue to rise in the short term, but it is unlikely to continue to rise in the long term.

If there is a fourth possibility, it will continue to fall, and the possibility is close to zero.

➤ Comparison of volatility data

Xiao Mifeng studied the fluctuations in 2017. The following table shows:

These 5 dates correspond to these 5 points on the BTC price chart:

In February 2020, due to the impact of the halving expectations, there was a peak, but at that time, Xiao Feng thought that it was not the start of the bull market, but at most the preparation for the bull market. Soon, on March 12, BTC experienced a fatal drop along with the US stock market, and then began to rebound gradually. Until the halving of BTC production, BTC fell again, and then started two rounds of increases. Xiao Feng also counted these two rounds according to the above content:

These three dates correspond to these three points on the BTC price line:

➤Trend analysis

❚Callback possible

From this chart we can see that BTC’s recent rise has seen almost no pullback.

Today, it has been 91 days since BTC’s last peak and 168 days since the first peak. The 2017 retracement point was 148 days away from the first peak.

Little Bee speculates that there may be a pullback in the near future, either by the end of the month or the beginning of next month.

❚Trend analysis

In the first case, if the pullback is large and there is no rebound, then the 2020 market will end here, and we will have to look forward to BTC's performance in 2021.

In the second case, if BTC rebounds quickly after the pullback, then 2020 may see a crazy rise like 2021.

The little bee thinks the first situation is more likely.

Logically, people's expectations for 2021 are higher than those for 2020.

From the data, we can compare the two previous tables. From the first peak to the second peak, the increase in 2017 was 65.36, while the increase in the second peak in 2020 was only 21.4%.

In terms of trend, BTC in 2016 was relatively flat. However, in 2020, it was more volatile, with an increase at the beginning of the year, a sharp drop in March, and ups and downs from the halving to the second half of the year. Because the BTC market was relatively small in 2016, but the volatility became larger in 2020, there may be a big drop after a big rise.

Therefore, the bee thinks that there will be a correction soon. Moreover, the bee is more inclined to the decline will be larger, and will stay at the bottom for a while, and then start the next wave of rise again in 2021.

❖Written at the end❖

I wrote this article mainly to analyze the current trend of BTC and remind everyone that there is a risk of a pullback, but I do not recommend shorting. I will not short even if the market is bearish!

If a pullback does occur, it would be a good time to get on board, but it is not advisable to go all in at once.

Finally, let me predict the possible new high of BTC. Because the price fluctuation of BTC in this round is too large, and the price in 2016 was relatively flat, it is impossible to judge the average of this wave, and we can only compare the peaks of the two rounds of fluctuations.

According to the trend in 2017, BTC’s peak in 2017 was 5.46 times the first peak. According to this multiple, the first peak of this bull cycle is 10119. According to this multiple, BTC will rise to 10119*5.46=55250 USD.

If BTC was 3.91 times of the second peak in 2017, the second peak of this bull cycle would be 12284.65, 12284.65*3.91=48023.

I don’t think that with the entry of institutions and the global release of fiat currencies, the investors in 2020-2021 will be more rational than in 2017. Therefore, BTC in this bull market may reach around $50,000. The most conservative estimate is half of that, 55,250/2 = $27,625. Generally, people tend to expect integers, so it is no problem to estimate it to 29,000.

To summarize:

1. Little Bee believes that the bull market may experience a correction in late November to early December 2021.

2. If there is an immediate rebound after the pullback, this year will be a bull market.

3. The peak of this round of BTC bull market is conservatively estimated at $29,000, moderately estimated at $39,000, and optimistically estimated at around $49,000.

Personal analysis, for reference only.