The dips are always the toughest part of crypto, and it’s very hard to tell when a dip is just a dip, and when it’s a catalyst for a full blown bear market. Here are a few arguments for why I think this is not the end of the bull run, and where we might be headed next.
* During the previous bull run in 2017, BTC dumped 25% in March, 20% in May, 35% in June, 35% in September, and then 20% in November before the final run up in December. That’s 5 substantial sell offs in a very short period of time.
* During the September 2017 sell off, the market cooled off substantially, setting up a huge bounce back into the final big run up to December. The September sell off shook out a lot of buyers (myself included), and then ran up 600% at the peak in December.
* This bull cycle has seen a sell off of 10% in November of 2020 and then again in December of 2020, both times bouncing off resistance at $20k before finally breaking through.
* January saw a sell off of 25% and February saw a 20% sell off. March saw a 15% sell off. This bull cycle has been running for over a year and has yet to see a sell off over 25%, which is a bit unusual for BTC. We have also only seen 2 sells offs of 20% or higher (now 3 considering the recent sell off), whereas the 2017 market saw 5 such sell offs. In order to achieve a 35% sell off, BTC would need to drop back down to around $41k.
* The [200 week moving average heatmap](https://www.lookintobitcoin.com/charts/200-week-moving-average-heatmap/) shows a very comparable value for September 2017 as we saw in the past month during this cycle. The 35% crash that followed in September 2017 brought the market down to a much better position for it’s final run up. It is very possible that this crash will bring the market back down to a better position for one big final run up lasting 2 to 3 months.
* The previous 2 BTC bull cycles took roughly 18 months to reach the top of the BTC price range. This cycle has lasted for just over a year.
All of these points indicate that there is still room for a big BTC run up in this cycle. I do not expect a 600% climb in the near future, but a 2x or even a 3x is not out of the question. While the crypto market has recently been very heated, BTC and the market in general has shown good strength against movements below $50k, and very solid resistance to anything under $40k. In my non-professional opinion, there is still room to run for a few more months after this correction.
However, nothing is guaranteed and we may find ourselves facing an extended down turn. BTC has risen dramatically in the past 12 months, and while there have not been many sell offs, the numbers of buyers at prices above $50k has not risen dramatically enough to push the prices much higher. The crypto market also faces pressure from several major governments that are considering further regulations. XRP is still in the midst of a battle with the SEC in the U.S. and the results could have major implications for other cryptocurrencies.
Having said all of that, I think when we zoom out and look at the big picture, we see that BTC is following it’s general historical trend, and while this dip may get worse before it gets better, the overall market is just taking a breather. The timing is right for a substantial correction, and with it will come the needed momentum swing for a big run up to the top of the cycle.
Good luck, DYOR, and don’t over leverage yourself.
TL;DR I don’t think this is the end of the bull run. But it could be, but probably not?
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