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 may play out.
Each 2017 And 2021 Bitcoin Cycles Noticed New Lows Round The 365-Day Mark Since The High
As defined by an analyst in a CryptoQuant post, the 2 cycles are extra related than one may 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 development on this metric for the 2017 and 2021 cycles:
Appears 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 worth 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 worth began to stabilize, and ran sideways for about 110 days.
Then, nonetheless, within the November of 2018 the worth of Bitcoin all of a sudden collapsed, and stored declining till the underside was reached round three hundred and sixty five days following the ATH.
As for the present 2021 cycle, the highest shaped final November, and since then the worth 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 may be nonetheless a hanging similarity between them.
Identical 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, however it’s unsure in the mean time whether or not it’s going to proceed to take action in the remainder of the bear or not.
If it certainly follows an identical development 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 might be shaped) earlier than the top of the bear.
On the time of writing, Bitcoin’s value floats round $16.5k, down 20% within the final week.
The worth of the crypto appears to have been shifting sideways lately | Supply: BTCUSD on TradingView
Featured picture from Jonathan Borba on Unsplash.com, charts from TradingView.com, CryptoQuant.com