The prediction of Bitcoin diverging into a bear market, has made enough rounds in the market to cause one worry. The last few weeks have been quite rough, with bitcoin being on 13-day downward price action. But there’s always an end to the tunnel, and here’s why you should not worry about the current price action.
This is an early stage of the bull market, and these prices will help shape the narrative further. Especially with underlying circumstances being changed as to who is hodling or buying now, this price action will enable an extended bull run, rather than 1-year good run followed by 3 crappy years.
An April Rebound – A Historical Analogy
Even though, in Bitcoin happenings of the past do not facilitate the future due to the dynamism of the industry, here’s something that might hold good.
March has been historically a bad month for Bitcoin price always, in the last 8 out of 10 years from 2011 to 2020 prices have dipped, maybe because of people selling to save taxes. But every price dip has been followed by a big price rise in April, Hence April is a historically good month.
Retracements and Pullbacks
This is another historical precedent. In 2017 average Bitcoin bull market pullback was of 16 days, which made way for a good bull run further. Right now, Bitcoin is in its 6th pullback, and it’s just been 13 days. Therefore, there are going to be pullbacks, and it’s not to be worried when it happens.
Options Expiry on 26th
A timeline of previous options expiry hints at a major bull run further. When bitcoin retraced -30% in 14 days in January, the price shot up to 102% in the next 30 days. The next-26% retraced in February ended with a 43% spike. Right now, Bitcoin is down by 18%, hence next month price could shoot up. This 26th 6 Billion USD worth of options expired.
Is there a change in the conviction of institutional buyers yet? Well, if the measure to that is Bitcoin ETF application then the answer is no. Scaramucci Fund, last week became 5th to apply for Bitcoin ETF.
Fidelity announced their wise options for Bitcoin exposure through ETF. Goldman Sachs filed to get more options for bitcoin exposure through ETF.
Therefore, where is the prediction of the bear market going away? This was best answered by Bloomberg analyst Mike Maglone, who said that bitcoin is
” Well on its way to becoming a global digital reserve asset a maturation leap in 2021 maybe be transitioning bitcoin to a risk of an asset in our view”.
The above, historical, technical, or fundamental analysis all hints that the Bitcoin bull run has just started and has a long way to go further.