A quant has identified the similarities between the 2017 and 2021 Bitcoin cycles, one thing that would trace at how the remainder of this bear market would possibly play out.
Both 2017 And 2021 Bitcoin Cycles Saw New Lows Around The 365-Day Mark Since The Top
As defined by an analyst in a CryptoQuant post, the 2 cycles are extra related than one would possibly anticipate them to be.
The indicator of relevance right here is the “drawdown from ATH,” which measures the share lower within the worth of Bitcoin following the all-time excessive throughout every cycle.
Here is a chart that reveals the pattern on this metric for the 2017 and 2021 cycles:
Looks like the present cycle hasn't gone as deep because the earlier one but | Source: CryptoQuant
In the above graph, the beginning level for the 2017 Bitcoin cycle drawdown is within the December of 2017, when the all-time excessive of the interval was set.
Following this high, the worth of the crypto took a pointy plunge till round when the drawdown from the ATH had reached a worth between 65-70%.
After reaching these drawdown values, the worth began to stabilize, and ran sideways for about 110 days.
Then, nevertheless, within the November of 2018 the worth of Bitcoin all of a sudden collapsed, and stored declining till the underside was reached round twelve months following the ATH.
As for the present 2021 cycle, the highest fashioned final November, and since then the worth has been dropping off. The chart reveals the trail this drawdown has taken up to now.
While the decline isn’t precisely the identical within the two cycles, there is nonetheless a hanging similarity between them.
Just like within the earlier cycle, Bitcoin plunged laborious following the highest, till the drawdown from the ATH hit a worth of 70%.
The crypto’s worth then consolidated flat related to within the earlier cycle, after which at across the 365-day mark, BTC made a brand new low after plunging similarly to the November 2018 crash.
So far this cycle has resembled the earlier one, however it’s unsure in the meanwhile whether or not it can proceed to accomplish that in the remainder of the bear or not.
If it certainly follows the same pattern from right here on, then the quant believes there would nonetheless be one other 100 days of sideways motion left (through which the cycle backside can be fashioned) earlier than the top of the bear.
At the time of writing, Bitcoin’s worth floats round $16.5k, down 20% within the final week.
The worth of the crypto appears to have been transferring sideways just lately | Source: BTCUSD on TradingView
Featured picture from Jonathan Borba on Unsplash.com, charts from TradingView.com, CryptoQuant.com