A quant has identified the similarities between the 2017 and 2021 Bitcoin cycles, one thing that might trace at how the remainder of this bear market would possibly play out.
Each 2017 And 2021 Bitcoin Cycles Noticed New Lows Round The 365-Day Mark Since The Prime
As defined by an analyst in a CryptoQuant post, the 2 cycles are extra related than one would possibly anticipate them to be.
The indicator of relevance right here is the “drawdown from ATH,” which measures the proportion lower within the value of Bitcoin following the all-time excessive throughout every cycle.
Here’s a chart that exhibits the pattern on this metric for the 2017 and 2021 cycles:
Appears to be like like the present cycle hasn't gone as deep because the earlier one but | Supply: CryptoQuant
Within the above graph, the beginning level for the 2017 Bitcoin cycle drawdown is within the December of 2017, when the all-time excessive of the interval was set.
Following this prime, the value of the crypto took a pointy plunge till round when the drawdown from the ATH had reached a worth between 65-70%.
After reaching these drawdown values, the value began to stabilize, and ran sideways for about 110 days.
Then, nevertheless, within the November of 2018 the worth of Bitcoin instantly collapsed, and stored declining till the underside was reached round one year following the ATH.
As for the present 2021 cycle, the highest fashioned final November, and since then the value has been dropping off. The chart exhibits the trail this drawdown has taken to this point.
Whereas the decline isn’t precisely the identical within the two cycles, there’s nonetheless a placing similarity between them.
Similar to within the earlier cycle, Bitcoin plunged onerous following the highest, till the drawdown from the ATH hit a worth of 70%.
The crypto’s value then consolidated flat just like within the earlier cycle, after which at across the 365-day mark, BTC made a brand new low after plunging in a similar way to the November 2018 crash.
Thus far this cycle has resembled the earlier one, but it surely’s unsure in the intervening time whether or not it’ll proceed to take action in the remainder of the bear or not.
If it certainly follows an identical pattern from right here on, then the quant believes there would nonetheless be one other 100 days of sideways motion left (during which the cycle backside will likely be fashioned) earlier than the tip of the bear.
On the time of writing, Bitcoin’s price floats round $16.5k, down 20% within the final week.
The worth of the crypto appears to have been transferring sideways not too long ago | Supply: BTCUSD on TradingView
Featured picture from Jonathan Borba on Unsplash.com, charts from TradingView.com, CryptoQuant.com