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History often repeats, and financial markets like Bitcoin and crypto regularly cycle. But past performance doesn’t always guarantee future results.
However, according to past Bitcoin price cycles, the crypto asset may require a visit to a price level referred to as the golden pocket – which also just so happens to be the crypto asset’s former all-time high – before the leading cryptocurrency by market cap has reached a final bear market bottom.
Bitcoin Bottom Resides At Former All-Time High, According to Past Performance
Markets are cyclical, and as the saying goes, history often repeats itself. If history repeats itself for Bitcoin relative to the crypto asset’s bull and bear cycles, $3,100 would have merely acted as a “false bottom” where the 2019 parabolic rally occurred from, and not the final stop before Bitcoin’s bear market is truly over.
Related Reading | $20K Day: A Look Back At Bitcoin’s Two-Year Rise and Fall
It’s all according to math, says one crypto analyst. In past Bitcoin market cycles, the leading crypto asset by market cap once its parabolic advance was broken and its bull market peaked, the cryptocurrency would fall all the way back down to a Fibonacci retracement level of 0.618 and 0.65 – considered the “golden pocket.”
For all you history lovers. pic.twitter.com/8jsqFjbE8G
— A Voice of Reason in a Sea of Insanity (@sometrader78) December 23, 2019
After Bitcoin peaked in price following the 2013 bull run, the cryptocurrency fell to a “false bottom” at the fib level of 0.382 before going off on a bear market rally.
Once that rally peaked was when Bitcoin made its final descent toward its true bear market bottom located not only within that golden pocket but at a level acting as a retest of former all-time high prices as support.
At the 2013 peak, Bitcoin price reached a high of nearly $1,200, before falling back to retest the former all-time high of $180.
After the 2017 peak, Bitcoin price ultimately fell to a low of $3,100, or the 0.382 fib level. If this same fib level during this new cycle also ends up being a “false bottom,” it would suggest that now that the bear market rally has peaked and failed to set a new high, and the cryptocurrency will next fall beyond the false bottom to find the true bear market bottom.
And if past performance indicates future behavior, then the final destination for Bitcoin may be the asset’s former all-time high, located within that important golden fib pocket, roughly around $1,000 to $1,2000.
Related Reading | Former IMF Economist: Current Bitcoin Trend is “Textbook Echo Bubble”
Such a drop would likely shock the cryptocurrency industry, and cause many projects to go bankrupt as a result. But just like the dot com crash, some analysts believe this is needed first before the crypto industry can once again grow, and eventually produce the Amazon’s and Facebook’s of the blockchain revolution.
Featured image from Shutterstock
