During Bitcoin’s last bear market, after crypto investors were convinced a bottom was in, the asset later broke down to set a new low – a low that coincided with the previous cycle’s top.
History often repeats itself, and with Bitcoin suddenly at prices, no one expected to see two years after a “bottom” was put in, a deeper fall to a previous peak cannot be ruled out.
History Often Repeats, But Do Crypto Market Cycles?
Historic recurrence is described as a phenomenon where strikingly similar events repeat over the years, and such instances have been recorded since the dawn of time.
Like the planets orbiting the sun or the four seasons, markets are also cyclical, and go through extended periods of downtrend, followed by growth and prosperity.
Bitcoin, like other financial assets, go through bull markets that increase asset valuations then later experience bear markets that wipe out those gains.
However, there could be more to comparing past Bitcoin cycles with the current cycle, beyond simple bull and bear market transitions.
According to one crypto analyst, the last Bitcoin bear market cycle gave investors hope after a “false bottom” was put in at the 0.382 Fibonacci level. This false bottom eventually gave way and caused the leading cryptocurrency by market cap to plummet to its true bottom at roughly $150.
Interestingly, this true bottom happened to be the top of the previous cycle’s bull market peak. It also represented a perfect fall to the “golden zone” – a key level where multiple Fibonacci levels converge.
When I first posted this, there were tons of:
"If Btc ever goes to 1k, I'm buying with everything I got" type comments.
Do people still feel the same way?
(No sarcasm, genuinely curious) pic.twitter.com/ACNf45Yw9S
— James (@sometrader78) March 23, 2020
Bitcoin’s Final True Bottom Could Be Previous Bull Market Top at $1,200
Should Bitcoin follow a similar path his time around, the current bear market bottom at $3,200 would be just a temporary “false bottom” and Bitcoin will fall back to its previous bull market cycle’s all-time high.
This peak current rests at roughly $1,200, suggesting that first-ever cryptocurrency could suffer yet another serious collapse in the days and weeks ahead.
Related Reading | Economist: Government Overspending Amidst Crisis is Bullish for Bitcoin
For more than two years now, crypto investors have been claiming they’d go all-in on Bitcoin if it ever returned to such prices. But now that such lows are near, the world is in a panic over a spreading pandemic, and a recession is all but guaranteed at this point, is anyone really ready to buy Bitcoin if it falls to such prices?
For every seller, there’s always a buyer, so someone would be buying Bitcoin at those prices, and those that do, just like the last time around, could see life-changing upside following the real bottom being put in.
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