Bitcoin Shows Parallels With 2017 Cycle, Here’s What Could Happen Next
A quant has pointed to parallels between the current and 2017 Bitcoin cycles, which could hold hints about what’s next for the asset.
The current Bitcoin cycle has shown interesting parallels with the 2017 cycle
As explained by an analyst in a CryptoQuant post, there have been five interesting recent events in the current cycle that are similar to what was seen in the 2017 cycle.
The 2017 cycle peaked in December of that year, while the current cycle peaked in November 2021. All of these cycles are not relevant in the context of the current discussion; only the bearish trends that followed their respective highs were achieved.
Related Reading: Bitcoin Circulation Rate Remains Low, Why This Could Be Bad For Rally
The chart below shows the percentage trend seen after the peaks of the 2017 and 2021 Bitcoin cycles:
The bear markets of the 2017 and 2021 cycles compared | Source: CryptoQuant
As you can see in the graph, the quantum has marked some of the relevant parts of the cycles that were equal between them. In both of these cycles, the price first observed a bear market phase where the asset consolidated endlessly. As for the 2017 cycle, the sideways movement was around the $6,000 level, while for 2021 it was around the $20,000 mark.
Both of these periods of consolidation ended with the price seeing a sharp drop. Assuming the declines after the FTX crash back in November 2022 were the worst this bear market will get, then the corresponding sharp dips in these cycles lead to bear bottoms for both of them as well.
After these declines, the price again took a sideways turn in both the 2017 and 2021 cycles. In the 2017 cycle, the price followed up this period of strong bullish momentum in the form of the April 2019 rally. The current cycle also seems to be showing something similar in the form of the rally that started earlier this year.
Bitcoin hit a roadblock midway through the April 2019 rally and fell into a sideways consolidation phase again. Quant believes that this is the phase the current cycle is in right now, as BTC’s price action has been quite stale recently.
The x-axis of the graph shows the number of days since the peak that these events occurred in these cycles. It is interesting how close the cycles seem to have been in not only the structure but also the timing of the events.
If the parallels between these two Bitcoin cycles will continue to hold in the future, the current sideways trend could be followed by a sharp increase in price, as the April 2019 rally also followed up its sideways phase with a strong uptrend.
BTC price
At the time of writing, Bitcoin is trading around $28,300, up 1% in the past week.
BTC has continued to move sideways in recent days | Source: BTCUSD on TradingView
Featured image from André François McKenzie at Unsplash.com, Charts from TradingView.com, CryptoQuant.com
