Bitcoin (BTC) has gone through four market cycles since it was born in 2009, from a low to a new high. The cycles ranged from more than 600 days to about 1,050 days. The last cycle just passed 300 days, which suggests it could last 3 to 12 months.
If the price of Bitcoin is stable for several months, or possibly a year, it can do two things. First, it could bolster the fundamental terrain of the next explosive bull run between 2016 and 2017. Second, it could cause other cryptocurrencies or altcoins to hit new highs, as some investors predict.
Why is it critical to slowly move upward at this stage in Bitcoin price?
Bitcoin’s price at BitMEX was just $ 3,596 on March 13. In just six months, BTC saw a 220% increase. Outperformed most traditional assets and indices, including gold.
Bitcoin price weekly chart. Source: TradingView.com
A steep bitcoin bull run could increase the chances of whales or large individual bitcoin holders making profits. In this case, the futures market’s excessive leverage due to cascading liquidations can lead to a large pullback.
However, if BTC gradually recovers over time and is above the USD 10,000 support level, This could lead to a more sustainable and longer-lasting bull cycle. The co-founder of 10% Holdings, Dan Tepiero, said:
“Prepare to be patient with Bitcoin. Each upward cycle lasts longer and is less extreme as the absolute monetary value of the dollar increases sharply. It may take another 6 or 12 months for the price to rise. An obscenely high price should no longer matter. Hodlers are happy. “
For example, The last two cycles were about halving or halving the Bitcoin-mined block reward. The second halving in Bitcoin’s history took place in July 2016. BTC’s bull cycle hit its all-time high 17 months later, in December 2017.
Bitcoin’s previous market cycles. Source: Dan Tepiero, Coin Metrics
If Bitcoin follows a similar trend as it did after the 2016 halving, could see a strong upward trend at the end of 2021. This would go with it perfectly too the popular stock-to-flow model suggesting that the price of BTC could hit six digits sometime next year.
What do short-term traders see?
Short term, Some traders expect the price of Bitcoin to consolidate over a longer period of time. A pseudonymous trader known as “BIg Chronis” said that longer-term charts indicate longer sideways price movements.
“Maintaining the bullish daily crossover is great for the bulls. They can parallel sideways price movements without a crossover, while the indicators for higher timeframes can fade again … that is, I expect values for side parts to lengthen longer.”
Michael van de Poppe, a full time trader on the Amsterdam Stock Exchange, He also said that this cycle will likely be longer than the previous one. Said::
“The funny thing is, this cycle will likely be longer than the last. It will be crazier than the last, however.
Typically, a longer period of stability for Bitcoin has resulted in the Altcoin market developing strongly. Kelvin Koh, a partner in Asia-based cryptocurrency fund Spartan Black, indicated that could boost sentiment in the altcoin market.