Bitcoin Historical Analysis for 2022
Bitcoin bull and bear market cycles occur just slightly differently each time, but they definitely have similarities. As the saying by Mark Twain goes: “History never repeats itself, but it does often rhyme.” In this article, I’ll highlight the points that I personally find interesting of the past 2 cycles, and project them onto this current cycle.
*Please note that the timelines and dollar amounts in this article are based on data and sources that I’m using, the exact numbers may vary depending on which sources you use. The point isn’t about the exact numbers but rather the patterns between cycles.*
During the first bull and bear market cycle, Bitcoin topped on the 2nd of December 2013 around $1,175. This was followed by a -70% drop from the top around April 11th 2014, followed by a rally of +99% topping in June 2014. (I should note that I’m choosing to ignore the almost -92% drop on February 10th 2014 — as it recovered within that same day). It’s useful to note here that this rally tagged the 200 Daily Moving Average (200DMA) and the 38.20% Fibonacci Retracement (Fib).
After this, the market formed an accumulation range between -77.50% and -81.25% from the top. This range was broken on the downside on 2 occasions, with price tagging -86% on January 14th 2015 and again on August 18th 2015. After the second touch of -86% the bear market was (basically) completed.
During the second bull and bear market cycle, Bitcoin topped on the 18th of December 2017 (4 years after the first) around $19,175. This was followed by a -70% around February 6th 2018, followed by a rally of +95% topping in late February 2018. This rally deviated well above the 200DMA but did indeed hit the 38.e0% Fib.
After the rally the market formed an accumulation range between -78.50% and -81.20% from the top. In this second cycle, price tagged -83.65% on December 7th 2018 and then tagged -83.88% on December 15th 2018, marking the bottom of that bear market. It should be noted that price continued to range for a while after the bottom price in December, and after that price tagged -83% again around February 6th 2019 before the bear market was completed.
Now for this current bull and bear market cycle, Bitcoin topped on the 10th of November 2021 (4 years after the second) around $68,958. This was followed by a -74.41% from the top around mid June 2022. If this move is to be followed by a rally of +95% to +99%, price could rally up to $34,300 to $35,500, which would indeed reach prices close to the 200DMA and the 38.20% Fib.
After this rally, if it does occur, the market should form a range between -77.50% and -81.25% from the top which would be around $15,500 and $12,950 respectively. During the first cycle the bottom was at -86%, and during the second cycle the bottom was almost at -84%. If there is a diminishing retrace during the bear markets, the bottom for this current cycle could occur around -81.36%. This means that the bottom price could develop anywhere between $12,850 and $9,650. The second tag of the bottom price would likely occur some time in early to mid 2023 to mark the completion of this bear market cycle.
From a technical analysis perspective, on the weekly timeframe Bitcoin does have strong support around $12,000. So, a bottom forming around those prices is very plausible.
What do you think about the analysis? Do you think it’s possible for price to go down below $10,000? If this does end up happening, are you prepared for it? Let me know. I would love to hear your thoughts.
Writer: Danyela Vásquez
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