Bitcoin Price Cycle Indicates another Year of Consolidation Before Breaking Above $20,000 August 30, 2020 August 30, 2020 Kelly Cromley http://1AZFjzw2#Nwf63pYaMWq#xIY
Bitcoin NewsAugust 30, 2020 by Kelly Cromley

Bitcoin Price Cycle Indicates another Year of Consolidation Before Breaking Above $20,000

Bitcoin (BTC), from the day of launch in 2009, had gone through four market cycles every time it rises from a low to attain a new historical high. Each of those cycles took 600 to 1,050 days for completion.

The latest cycle has crossed 300 days, implying that it could continue for another 3-12 months.

If Bitcoin’s price stays stable for many months to up to a year, two things can happen. Initially, it could form the base for the next price rally as witnessed between 2016 and 2017.

Secondly, it could pull other cryptos, also referred to as altcoins, to new peaks, as some analysts argue.

On March 13, the price of Bitcoin was at $3,596 on BitMEX. In a matter of six months, BTC has gained 220%, eclipsing almost all conventional assets and indices, in addition to safe haven assets such as gold.

The sharp surge in the price of Bitcoin could encourage whales or individual investors who hold large quantities of Bitcoin to book profit. In such circumstances, futures market, which usually has piled up open positions on account of high leverage, might undergo a deep retracement.

If Bitcoin slowly rebounds over time and stays above the $10,000 mark, it could pave way for a long-term bull cycle. Dan Tepiero, co-founder of 10% Holdings, said:

“Prepare to be patient in Bitcoin. Each up cycle takes longer to play out and is less extreme as absolute dollar value gets much larger. May or may not be another 6-12 months before price breaks up. Should not matter as end price point obscenely higher. Hodlers rejoice.”

As an illustration, the previous two cycles completed around the time when Bitcoin block reward halving event took place. The second halving event took place in July 2016. 17 months later i.e. on December 2017, Bitcoin completed its bull cycle.

If Bitcoin demonstrates a trend comparable with the post 2016 having event, then a sharp jump in price can be witness in the final leg of 2021. The argument aligns with the popular stock-to-flow model that forecasts six figure price for BTC sometime in 2021.

In short-term, some traders predict consolidation of Bitcoin’s price for an extended term. A trader, known by nickame “BIg Chronis” has stated that higher time frame charts indicate an extended range bound price action.

Michael van de Poppe, a professional trader at the Amsterdam Stock Exchange, also opined that the cycle will probably last longer than the earlier one. He said:

“The fun part is that this cycle will, probably, take longer than the previous one. However, it will be more insane than the previous one. I like it.”

Normally, an extended period of consolidation for Bitcoin has paved way for the altcoin market to record impressive gains. Kelvin Koh, an associate at Asia-based crypto fund Spartan Black, hinted it could propel the sentiment across the altcoin market.

AuthorKelly Cromley

Kelly is our in house crytpto researcher, delving into the stories which matter from blockchains being used in the real world to new ico coming out.