Bull Run Unaffected

Bears Beware

By PanteraPublished 3 years ago • 4 min read

When charting, drawing random lines does not represent anything. I usually have the references of EMA lines, MACD (but not so often), occasionally RSI, and a few more indicators and oscillators to find some good trading opportunities. Mostly using the daily or weekly scale. We need to know what each indicator represents, otherwise, we won't use them correctly. I don't look for any patterns like wedges, head and shoulders, cup and handles, elephants, hammers, or genitals as some traders enjoy.

Anyone who starts down the road to becoming a trader eventually comes across the statistic that 90 percent of traders fail to make money when trading the stock market. This statistic deems that over time 80 percent lose, 10 percent break even and 10 percent make money consistently.
-Source: Wealth Within

$BTC is the driving force for the whole market and while its dominance is getting lower, the rest of cryptocurrencies are affected by its rapid movements.

In this post, I try to make meaning of the current bull run and find optimism after a massive price crash in the crypto market that removed one trillion dollars from the total market cap.

The charts below are created with the use of Tradingview.

The previous bull run: 2016-2017

Source: Tradingview (right click and open in a new browser tab for better view)

This is the previous bull run. I only used the indicator giving the dips that occurred for BTC price since the second halving (July, 9th, 2016).

The chart depicts price action for BTCUSD trading pair on the Coinbase exchange and each candle represents one week of trading action. The image sadly is not top quality so I recommend right-clicking and opening on a new browser tab for a better view.

There have been 5 major dips that lasted a few weeks, with the most violent one in December 2017 when BTC lost 47% of its price.

The main BTC dips start at the time it reached its previous ATH at $1200 (previous ATH in 2013). In January 2017 price tried to break out and make a new ATH but only revisited the previous one and massive selling happened. A drop of ~40% was the first major one. There were some weeks of price decline after the 2nd halving but it wasn't violent, it was profit-taking from traders and the market was shaking out the halving speculators.

Second BTC Halving Date: July, 9th, 2016

The dips of the 2017 bull run are given in percentages below:

38% - January 2017 (Rejection of previous ATH at $1200)
33% - March 2017
42% - July 2017
40% - September 2017 (China Ban)
33% - November 2017
47% - December 2017

Important factor the time of the halving. Prices didn't react immediately after the second halving.

The current bull run: 2020-2021

This is the chart of the current bull run, starting from the May 2020 halving. I didn't use the March crash for this chart because it wasn't making sense anyway, it was just a market in panic and algorithms trading.

Price was restored in weeks as it was expected.

Third BTC Halving: May, 18th, 2020

The dips of the current (2020-2021) bull run are given in percentages below:

22% August 2020
17% November 2020 (A small rejection when reached previous ATH of $20k)
31% January 2021 (From ATH of $42,000)
53% May 2021

We have had at least 2 dips less than the previous bull run.

What I see in this chart when comparing these two bull runs, is three smaller dips in and a huge one of more than 50% in the current bull run, while the previous one was more consistent.

The first three dips velocity can be explained by the huge volumes entering the market, the stable coins that actually provide liquidity and reduce the effect of dips, and the increase of availability of cryptocurrency purchases by services like Cashapp, Robinhood, eToro, Revolut, Paypal, etc.

However, the volatility of the market remains and when the really bad news hit Crypto, the pace of the dip was again similar to those of 2017.

Important to notice:

$BTC reached the 2013 ATH 6 months after the second halving
$BTC reached the 2017 ATH 17 months after the second halving
$BTC reached the 2017 ATH 6 months after the third halving
$BTC reached the current ATH 11 months after the third halving

Attention to the last part, as there is a high possibility nothing has ended yet. It is one of the reasons many think it is too late to end now.

Price action is moving identical to the previous bull run for the Cryptocurrency market. It is something many traders discovered very early and it is the reason most Crypto investors have not sold anything yet.

The previous All-Time High at $20,000 was a result of 17 months of bullish market sentiment starting since the 2nd halving. $BTC's last ATH was only 11 months since the 3rd halving.

News coming from China and confusion created by Musk was the main reason for the massive dip this May. But the price seems to have stopped declining recently and not reacting to increased bad publicity and negative news coming from banks and government officials.

Analysts are currently divided after Cryptocurrencies dropped and while many rushed to claim the end of this market cycle there is a good chance that the market will revive and make another leg up. The cryptocurrency market can reach a 4-8 trillion dollar market cap since it found support at this level.

At the 65k level, the market looked like begging for a correction. It is a deep correction but not one that changed the course yet. In the following weeks, it is very possible for prices will recover.

By July we will have a better picture.