This Bitcoin Rally Is Similar To Genesis Points Of Historical Uptrends: Glassnode

Keshav Verma

1 year ago

3 mins read

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Data from Glassnode reveals that the structure of the current Bitcoin rally is looking similar to the genesis points of historical uptrends.

Bitcoin Recovery Since November Lows Is Reminiscent Of Past Rallies

In its latest weekly report, the on-chain analytics firm Glassnode has looked into how the current Bitcoin rally lines up against similar rallies that the cryptocurrency observed during the previous cycles.

To make this comparison, the analytics firm has taken the data for the performance of the coin starting from the all-time high in each cycle.

Here is a chart that shows how the past bear market rallies have looked like in terms of this metric:

The bear market rally performance throughout the different cycles | Source: Glassnode's The Week Onchain - Week 28, 2023

Note that only the upwards performance of Bitcoin is being considered here, and the drawdown has been excluded. From the chart, it’s visible that during all the cycles, gains after the ATH was set disappeared in time as the bear market went into full gear.

Soon after the bear bottom formation took place, these cycles saw the asset experiencing a recovery rally. In the current cycle so far, it’s not completely certain yet if the November 2022 low seen after the FTX crash was indeed the cyclical bottom.

However, if it’s assumed that this low was indeed the bottom, then the rally that has been going on in the past few months would take the role of the recovery rally in the current cycle.

Interestingly, so far, the cryptocurrency has seen an uplift of 91% since the aforementioned bottom, which is very similar in scale to the recovery rallies of the past cycles.

“With the exception of 2019, all prior cycles which experienced a similar magnitude move off the bottom, were in fact the genesis point of a new cyclical uptrend,” explains Glassnode.

The reason 2019 was different is that the April 2019 rally (which may have normally acted as the recovery rally from the bear market bottom) ran out of steam before long and the price subsequently declined.

The drawdown was then extended in March 2020 as the crash due to the emergence of COVID-19 took place. It’s the recovery rally from this crash that ended up leading to the 2021 bull market.

Naturally, if the pattern of the first two Bitcoin cycles is anything to go by, the current recovery rally structure may mean that the asset is now on its way toward a cyclical uptrend.

The analytics firm has also looked at the rally from another angle: this time in terms of the drawdown (that is, the negative performance).

The drawdowns across the bull markets | Source: Glassnode's The Week Onchain - Week 28, 2023

As displayed in the graph, the Bitcoin rally has seen a peak drawdown of just 18% so far, which is clearly much less than what the previous bull markets saw. “This perhaps suggests a relatively strong degree of demand underlies the asset,” suggests Glassnode.

BTC Price

At the time of writing, Bitcoin is trading around $30,400, down 2% in the last week.

BTC has continued its sideways movement recently | Source: BTCUSD on TradingView

Featured image from iStock.com, charts from TradingView.com, Glassnode.com

Keshav Verma

Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.

Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.

In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.

Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.

Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..

Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.

Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.

As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.

Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.

Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.

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