If History Rhymes, BitcoinMay Retrace To High $5,000s
What a week it’s been for Bitcoin (BTC). In the past 72 hours, the asset has rallied from the low-$6,000s to $7,500, then to $6,900 (current), driven by a newfound sense of hype, passion, and belief in the cryptocurrency cause.
However, as the market has cooled temporarily at least analysts have begun to get more level-headed, doing their utmost to figure out where cryptocurrencies could head next. This time for pondering has led to some staggering revelations.
Bitcoin May See Retracement
Popular trader Josh Rager recently suggested that there are amazing similarities between 2015’s recovery out of a bear market.
During that cycle, BTC bottomed around $200, accumulated around $300 for months, went parabolic to tap $500, then saw a pullback. What’s more, the three-day Super Guppy, a key long-term trend indicator, didn’t signal a “buy” (green) until after the pullback.
$BTC – 3D chart Super Guppy
Amazing similarity between the last bear market prior to uptrend
Bitcoin had a similar parabolic push out of accumulation, followed by a pullback and uptrend
Watching for a potential pullback where I’ll add more to the stack pic.twitter.com/JABErMhlMq
— Josh Rager 📈 (@Josh_Rager) May 12, 2019
Sound familiar? Well, that’s because Bitcoin is seemingly doing effectively the exact same thing, but in a different price region. If history is followed to a tee, Bitcoin may fall a further ~20% from current levels, and may then begin the second phase of accumulation, which will last up to seven months. From there, BTC should begin to rally parabolic into the block reward halving event, setting the stage for the next fully-fledged bull run.
$BTC The last parabola that broke us out of a bear market resulted in a near 7 month consolidation. With alts at their ATL supports against USD, if this sort of consolidation happens again on BTC after it tops (likely), we could be in for the REAL #altseason. pic.twitter.com/c3WwncLyda
— HornHairs 🌊 (@CryptoHornHairs) May 11, 2019
Price Action Still ‘Hella’ Bullish
It is still important to note that the current price action seen with cryptocurrencies has been surprisingly bullish. Per previous reports from NewsBTC, as BTC tapped year-to-date highs on Saturday, the daily volume at BitMEX, the foremost crypto futures platform, hit a jaw-dropping nominal $10 billion. Potentially equally as importantly, Grayscale’s Bitcoin Trust surmounted $50 million on Friday, signaling interest in cryptocurrency from accredited investors, most of which are purported to be institutions.
The most important part, this volume surge has been catalyzed by those already in the space. As NewsBTC’s Joseph Young postulated on Twitter, “existing money in the crypto market [is] coming back due to overall growth in confidence/comfort.”
And as researcher Alex Krüger adds, amid the recent price action, the “Bitcoin” search term has seen not too much of an increase in volume. This directly implies that once consumers wake up to the latest cryptocurrency rally, the run will be even larger and more violent than it is now. But that begs the pressing question — will consumers down the red pill once again?
— Alex Krüger (@krugermacro) May 11, 2019