With a 30% increase at the beginning of the year, will Bitcoin usher in a new bull market?

Source: Maitian Finance

Bitcoin has seen an exciting rise in the first month of this year, and its price is currently stable at around $9,300. At the same time, as the third Bitcoin halving approaches, people are increasingly looking forward to a new round of Bitcoin bull market. But will the expected Bitcoin bull market really come?

At the beginning of January, I was most worried that the monthly chart gave a very pessimistic signal. However, at that time, some important indicators on other levels of the candlestick chart, including MACD, showed bullish signals.

So at the time I expected that if Bitcoin could maintain its price above $8,500 for 2 to 3 weeks, a new bull market would likely begin.

Now that three full weeks have passed, investors are feeling more excited than disappointed.

A new month has begun, and all technical indicators are currently bullish. As a result, market sentiment has also changed significantly.

So, is the bull run we have been waiting for really coming? Let’s find some evidence.

On January 14, the price of Bitcoin rose from $8,140 to $8,879, a daily increase of about 8.5%, and the difficulty of Bitcoin mining also increased by 7.08% on the same day. So, can we find some connection between them?

Let’s look back to January 1, when the price of Bitcoin was about $7,200. The mining difficulty increased by 6.57% on that day, but the price of Bitcoin did not change immediately. However, 5 days later, the price of Bitcoin rose by about 7%. It then remained stable for 9 days until January 14, when we saw the price of Bitcoin rise by 8.5% again.

Then on January 28, the difficulty of Bitcoin mining increased again by 4.67%, and the price of Bitcoin jumped from $8,900 to $9,350, which was again the same as the increase in mining difficulty.

With the next 4.46% difficulty increase now just over a week away, could this mean another 5% increase in the price of Bitcoin? If so, this indicator could give us an opportunity in this new bull run.

In addition, the weekly MACD indicator has always been proven to be a sign of Bitcoin bull-bear conversion. During last year's rebound, the weekly MACD indicator of Bitcoin showed bullishness on February 11, 2019, when the price was only $3,695.

After that, Bitcoin started a strong rebound that lasted for 28 weeks, rising to a high of $13,800. Until August 19, the MACD indicator showed a bearish trend, when the price of Bitcoin was still around $11,000, but then Bitcoin started a long correction.

Currently, the weekly MACD indicator is also approaching the golden cross. Will this be a signal of a bull market in the theory of justice?

However, there are various news spreading now. Yesterday, some netizens predicted that the price of Bitcoin will rise by $100,000 in 2020. But I think this prediction is still sensational and unfounded. Because historically, the price of Bitcoin will not start to rise sharply until 6 months to a year after the actual halving date.

In November 2012, when Bitcoin was halved for the first time, the price of Bitcoin was around $10. It was not until March 2013 that the price of Bitcoin climbed to $30. However, in June 2011, the price of Bitcoin once exceeded $31.

However, the real parabolic rise occurred after the second hit of $30 in March 2013. In April 2013, the price of Bitcoin reached $269, and then fell back to around $130. It was not until November 2013 that the price of Bitcoin reached $1,176. At this time, a full year had passed since the halving.

The second Bitcoin halving occurred in July 2016, when the price of Bitcoin was around $650, about 45% below its all-time high. By December 2016, the price had risen by about 10%, and it was not until March 2017, 10 months after the actual halving, that the price of Bitcoin exceeded its previous all-time high.

So with this in mind, what are the chances that Bitcoin will reach its previous all-time high of $20,000 in 2020, let alone $100,000?

Therefore, I expect that Bitcoin may experience a relatively steady rise in 2020, but the real parabolic rise may not occur until 2021.

Currently, Bitcoin has encountered strong resistance around $9,500. However, as the mining difficulty increases again in a week, I expect Bitcoin to break through this key point and return to the $10,000 mark.

Of course, if Bitcoin fails to break through the key resistance level of $9,500, it may retest the support around $9,150 and $9,000. If it falls below, it may fall further to $8,600.

So now, we can first focus on the support of $9,500. You can continue to hold your long positions with a stop loss of $8,600.