So I have been thinking about the weakness bitcoin has been showing lately. In a way, bitcoin cooling off over the last couple of months is understandable considering how crazy the run-up was since the end of September. I have considered the consolidation phase that bitcoin has been in for over 2 months as very healthy. I still believe that but lately, with bitcoin showing increased weakness I have started to wonder if we may see more than just an orderly consolidation followed by bitcoin breaking out and heading to the ultimate bull market peak.
Instead, I was wondering if we might see this bull market mimic the 2013 bull market. During the 2013 bull market, there was a parabolic run-up to a short-term peak, followed by about a 77% correction. From the low of the correction bitcoin then increased more than 1700% over the next 5 months to the final bull market peak.
2013 Bitcoin Bull Market
So what do I think this bull market possibly could look like? Before I get to that I want to say that this is just one possible scenario, and most likely the chances of it happening are pretty small right now. As time progresses though the odds of this may increase if bitcoin's weakness continues.
Anyway, if this correction deepens to one that is similar to the bull market correction in 2013, let's just say like 70% from the April 14th peak. That would put the low at just under $20k, which would also be a re-test of the breakout level (the 2017 all-time high). If that did happen I could see a period of months before bitcoin would return to the April levels and pass the April 14th all-time high. Once that happens though as was the case in 2013 I think bitcoin would then go parabolic again on a final push over a month or two to the final bull market peak. From the lows of the 2013 correction bitcoin surged over 1700% to the final peak. A similar surge from a theoretical low of around $20k would put a peak up near $340,000.
Theoretical 2021 Bitcoin Bull Market Correction
Theoretical 2021 Bitcoin Bull Market Correction #2
Okay, maybe that first scenario is a little too severe. What if this correction does deepen but only to around a 50% pull back from the all-time high. That would put the low of the correction around the $30k level, which would also put it near the low of the dip we saw in January. From there we could see a slow recovery taking several months before BTC finally breaks the all-time high and one more time goes parabolic up to the final bull market peak. Of the two scenarios, I would consider this one to be much more likely. It is also very possible that bitcoin could already be very close to the bottom of this correction. We could just see bitcoin wander sideways or drift slightly lower from here but not see this correction significantly deepen.
Obviously, I have no idea where bitcoin is going to go from here but I still don't believe we have seen the peak of this bull market yet. Even if we do see a much deeper correction develop I still feel that the bull market will resume when this correction ends. I feel that even as crazy as this bull market has been, the best is yet to come.
Take Care,
BigskyCrypto
info@bigskycrypto.com