Cryptocurrency space has been delighted over the recent price rally especially since it has arrived after one of the longest crypto winters. The price rally started on April 2nd, which saw major cryptocurrencies make unprecedented gains for the next three days. During this period, Bitcoin and other altcoins broke their upper key resistance levels to make some ground for the lost market capitalization during the 2018 bearish trends.
The recent price rally caught everyone off-guard since the majority of the analysts have predicted that the bulls might arrive in the latter half of the year. The crypto space has not been able to arrive at a certain cause for the unprecedented rise, however, there are various theories behind it.
One of them suggests that the rise in prices was caused by an anonymous whale pumping the market with a load of Bitcoin which triggered the price rally. Another theory suggests that the price rally was caused due to an April fool article claiming that SEC has approved Bitcoin ETF in an emergency meeting after months of delays.
Another speculation says that the Bitcoin Future contracts trading saw a spike on Wall Street which consequently lead to the price rally. Whatever may be the cause of the recent price rise, but one must understand that the current market trends are not an indicator of the bull run.
The crypto trade market is definitely uncertain, but there are a lot of patterns which draw a parallel with the 2017 price peak. Let us analyze the parallels between 2017 and the current trends to understand why the current trends are not an indicator of impending bull run.
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Cryptocurrency Trade Market Would Go Through Another Bottom Before Bulls Take The Charge
During the 2017 price peak which saw Bitcoin reach an all-time high of around $20k, the markets went through a cycle of bubbles and price bottoms during the beginning and middle of the year, which is quite similar to the current trends. Analysts say that the current price rally would be followed by a price bottom and the market trends might see another bubble like behavior before rebounding towards the end of the year.
The analysts suggest that the trading volume data and the behavior of the market are following the same pattern as that of 2017, and the current price rally must not be mistaken for a full-fledged bull run.
If we talk about 2017, Bitcoin prices were around $900 at the beginning of the year which reached around $5,000 towards the mid of September. After reaching $5k, the market saw another bottom and prices dropped to $3,400 just two days after reaching the $5k mark.
By mid-October, the bulls took charge again and the prices of Bitcoin touched $5k for the second time within a months time. However, after October there were no halts and Bitcoin soon sored past $10k, $15k and peaked an all-time high of $19,783 on December 17.
However, right after peaking an all-time price high of around $20k, the prices dropped by a massive 30%, bringing the valuation to around $11k, over the next few days the price volatility of Bitcoin saw it recover to over $16k and finally end the year at $13k.
The 2018 crypto winter surely cut down the volatility factor by a significant amount, and that is the reason more traditional investors are keen on making crypto investments. But, one must understand that despite the bullish nature of the community during the recent price rally, the market would rebound and see another bottom, before bulls finally take charge to reach this year’s highest price point.
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The crypto trade market has matured quite fast in days after 2017 peak, and this is the reason that crypto is now seen as one of the more viable investment options then it was ever before. The price of Bitcoin might not rise as high as 2017 since the market is significantly less volatile, but in coming years it would surely go past $20k and stablize its position over it.
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