Bitcoin finding a bottom has been an increasing speculation, and as this continues, the appearance of a historical price action has come in support of a strong demand around a particular trading range.
Crypto Monk, founder of CryptoMonsoon podcast on YouTube and a well-known Bitcoin and altcoin trader, of recent, took to his Twitter to outline the similarities between the price action of Bitcoin in 2014 and that of today.
Bitcoin (BTC) Price Today – BTC / USD
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The uptrend that happened in 2014, later discovered to have been artificially pumped just before the hack of Mt.Gox took place, increased the exchange of the Bitcoin to USD to a high $1,200. The price was then brought low to $103 after the pair corrected to the downside. This indicates a 91% just in 5 months.
Later, a strong demand area between $160 and $200 was established by the pair (BTC/USD), which led to a strong bearish sentiment, creating yearly highs towards $509 in 2015 and almost twice its initial high ($1,173) in 2016.
More pumps resulted in extensions in the uptrend, and by the close of 2017, Bitcoin set a new all-time high, surpassing $19,000.
The Downtrend in 2018
The launch of thousands of blockchain projects was the major reason behind the high demand Bitcoin experienced during the uptrend that occurred between 2014 and 2017. Those feeling that they missed their “buy-the-dips” opportunity, were taking bullish positions on the native tokens of projects. They substituted their Bitcoins for new altcoins. At the end, most blockchain projects welcomed so many investors from Bitcoins, but couldn’t fulfill their promises in areas of investment and development. The selling pressure placed on the Bitcoin market was majorly the hand work of ICOs, buying the price to as low as $5,775.
According to Crypto Monk, the Bitcoin market crash in 2018 is similar to the crash that happened in 2014. In the two cases, the market was crashed by malicious actors. After they were gone for good, a strong demand was created around the new bottoms by serious players.
Most of the time, the performance of a company’s past stock is studied by professional investors, in order to comprehend the possible return of the asset in the future. Historical data is found to be very vital by technical analysts in understanding possible resistance and support leads, while fundamental analysts have defined it as a major factor determining the value of an asset and potential for growth.
When we talk of Bitcoin, each cycle explains a bubble made up of serious and speculative investments. Speculative investments leave the markets in the hands of serious investments each time a high is attained. This is one good reason why the price has never crashed to zero.
It seems Bitcoin has just completed another bubble cycle. However, this time, investors are more exposed and experienced in the field than before. This is a good reason why 90% of ICO projects launched in 2018 couldn’t raise the necessary funds. Moreover, Bitcoin is becoming a much-recognizable market than before, thanks to the institutional investments as well as the upcoming regulators.
