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Recent events indicate that a Q4 “blow-off top” is once again on the table, as the Bitcoin price recovery clings to its 23 percent weekly gains.
Analysts believe Bitcoin (BTC) is preparing for a comeback that will lead to a repeat of the classic bull run years of 2013 and 2017.
As $42,400 local highs appeared on July 31, narratives around the market are flipping back to a bullish Bitcoin “supercycle.”
Bulls come out for 2021 close
Since mid-May, Bitcoin has been working hard to recover from the effects of the China miner rout, but last week’s price gains were stronger than most expected.
Rather than experiencing a significant drop, BTC price action has maintained its gains, which at the time of writing total 23 percent in a week.
What seemed unthinkable just seven days ago is now the flavour of the month among a growing segment of the analytical community.
“History doesn’t repeat itself but it often rhymes” #bitcoin
A repeat would be a Q4 blow off top. New ATH’s into 2022 seem more likely. Super cycle/last cycle will depend on what happens in 2023 IMO. https://t.co/07Ryn3pcTf
— ChartsBTC (@ChartsBtc) July 31, 2021
“Following a troubling three months of news and price action, bitcoin went on to print five green monthly candles in a row and went up ~10x in the second half of 2013,” Jeff Ross, founder and CEO of Vailshire Capital, said in Twitter comments Saturday.
“I still contend that 2021 will behave in similar fashion.”
With its latest uptick, meanwhile, BTC/USD broke through its 21-week exponential moving average, something which analyst Rekt Capital described as a “time-tested bull market indicator.”
The supply shock is back
While Ross added that such a prediction was “just a guess,” he has an increasing number of on-chain indicators to support him.
Investor behaviour reflects the shift in sentiment. Strong hodlers with little to no history of selling their BTC are now in control at levels not seen before and not seen since Bitcoin’s current all-time high of $64,500 in April.
“This is very bullish,” Lex Moskovski, chief investment officer of Moskovski Capital, summarized alongside an accompanying chart from Glassnode. It showed hodler conviction in terms of an increasing amount of the BTC supply becoming illiquid — taken off the market.
“Bitcoin ‘supply shock’ is now at levels that previously priced Bitcoin at $53K,” fellow analyst William Clemente commented on the same data.
“Consolidation after 10 straight green days is very reasonable but still remain bullish over the coming weeks.”