Quant Points Out Striking Resemblance Between 2017 And 2021 Bitcoin Cycles

Keshav Verma

1 year ago

3 mins read

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A quant has pointed out the similarities between the 2017 and 2021 Bitcoin cycles, something that could hint at how the rest of this bear market might play out.

Both 2017 And 2021 Bitcoin Cycles Saw New Lows Around The 365-Day Mark Since The Top

As explained by an analyst in a CryptoQuant post, the two cycles are more similar than one might expect them to be.

The indicator of relevance here is the “drawdown from ATH,” which measures the percentage decrease in the price of Bitcoin following the all-time high during each cycle.

Here is a chart that shows the trend in this metric for the 2017 and 2021 cycles:

Looks like the current cycle hasn't gone as deep as the previous one yet | Source: CryptoQuant

In the above graph, the start point for the 2017 Bitcoin cycle drawdown is in the December of 2017, when the all-time high of the period was set.

Following this top, the price of the crypto took a sharp plunge until around when the drawdown from the ATH had reached a value between 65-70%.

After reaching these drawdown values, the price started to stabilize, and ran sideways for about 110 days.

Then, however, in the November of 2018 the value of Bitcoin suddenly collapsed, and kept declining until the bottom was reached around 365 days following the ATH.

As for the current 2021 cycle, the top formed last November, and since then the price has been dropping off. The chart shows the path this drawdown has taken so far.

While the decline isn’t exactly the same in the two cycles, there is still a striking similarity between them.

Just like in the previous cycle, Bitcoin plunged hard following the top, until the drawdown from the ATH hit a value of 70%.

The crypto’s price then consolidated flat similar to in the previous cycle, and then at around the 365-day mark, BTC made a new low after plunging in a similar fashion to the November 2018 crash.

So far this cycle has resembled the previous one, but it’s uncertain at the moment whether it will continue to do so in the rest of the bear or not.

If it indeed follows a similar trend from here on, then the quant believes there would still be another 100 days of sideways movement left (in which the cycle bottom will be formed) before the end of the bear.

BTC Price

At the time of writing, Bitcoin’s price floats around $16.5k, down 20% in the last week.

The value of the crypto seems to have been moving sideways recently | Source: BTCUSD on TradingView

Featured image from Jonathan Borba on Unsplash.com, charts from TradingView.com, CryptoQuant.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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