Bitcoin: Bullish or Bearish?

Written by Edward Gonzales

July 21, 2021

It can be difficult to predict the movement of an asset like Bitcoin. Having such a short price action history makes it difficult to judge the assets long term swing highs and swing lows. Based on all recorded historical data the price of Bitcoin has only gone up in value. The term “bearish” must be used lightly when placed next to Bitcoin as each “bear season” has been miniscule compared to its overall bullish momentum. 

There have been large notable price swings in Bitcoins price action the last ten years. However it is observable that historically over time the price of Bitcoin has only ascended. Yet everytime Bitcoin has a -30% pullback spectators and nonbelievers will declare Bitcoin is dead without showing how far up the price has really moved. In this article, we will observe some previous price action technicals of Bitcoin to see what makes a bull or bear run. 

We must first note the reality of Bitcoins ability to store value appreciatively. According to Bitstamp, the original global crypto exchange, the price of Bitcoin is up +268,174.96% as of July 13th, 2021 at 07:00 PM from August 17, 2011. With this amount of growth, a simple $100 invested ten years ago would have yielded approximately +$268,000 if the investment were cashed out at $31,388.17 per Bitcoin. 

That is a nice return for just $100. If one was able to cash out in mid April at $60,032.29 per Bitcoin, the returns would have been even greater at roughly +$513,000 from just a $100 investment. 

A fine investment opportunity indeed for those who were fortunate enough to discover Bitcoin before 2011. This price movement did not occur overnight but over ten years. Many people come to cryptocurrency expecting to make these kinds of gains overnight. That illustration has been distorted by some media publications. While it is entirely possible to get rich from Bitcoin and cryptocurrency investing, it typically does not occur overnight. These types of price movements often occur in impulsive and corrective waves that can range greatly in both directions. 

While the price of Bitcoin has increased greatly over time it has also seen long periods of downtrending price action as well. There is usually a recovery after each major downtrend that exceeds the previous swing high. Let’s take a look at Bitcoins first notable bull run. 

Bitcoin Bull Run of 2013

The first great Bitcoin bull run (backed by exchange records) began at an outbreak confirmation on February 6th, 2013. This was the second outbreak confirmation after price broke above its previous all time high of  $16.42. The previous swing low of Bitcoin ranged one hundred and seventy-one days back to August 19th, 2012 at a price of just $7. Ranging from that swing low date, the first leg of the 2013 bull run shot up +2,875% to a new high of $258.77 and lasted two hundred and thirty-four days. 

An astonishing ride for those involved and drove spectators crazy. This was the first wave of FOMO that led many investors to buy near the top. The price of Bitcoin then fell from a high of $258.77 to a low of $44.79 for a whopping -82%. This sharp steep drop in the price of Bitcoin occurred over just two days. This was the first major retrace as this was the first major parabolic price movement the asset had experienced. 

After the initial “flash crash” there was a price movement of +168.48% which occurred in just one day. From that peak price fell another -57.92% in just three short days. Nine days later, price would travel yet another +234.27% before dropping another -52.39%. Each one of these price swings created an amazing opportunity for the observant and skilled trader. 

Here is how that price swing range looks compared to its bullish run up. 

The overall initial recovery time from the peak of the first leg was eighty-six days which turned a higher low of $63.29 from the $44.79 low. 

Investors that took part during the pilot days of Bitcoin were shocked at their returns. Many of these early investors and late FOMO investors cashed out as the price was falling in the days and weeks after. Spectators deemed the coin “dead” and/or “dying”, however this was just the beginning. 

The entirety of the first bull run saw tremendous price increases in excess of +13,000% as illustrated in the photo above. The first leg is still outlined for comparison. There is an observable consolidation range after the first leg. From the same initial date of August 19th, 2012, Bitcoin traded to a new all time high of $1155.97 after four hundred and sixty-eight days. 

After the most impressive bull run in just about any asset class history, Bitcoin fell an incredible -86.92%. The duration of this downtrending market spanned four hundred and twelve days and can be considered Bitcoins first major bear market conditions. Again spectators and nonbelievers weighed in during this time claiming Bitcoin to be “dying”, and the term “bubble” was starting to be used. Still, the best for Bitcoin was yet to come. 

Bitcoin Bull Run of 2017

It was impossible to foresee just how high Bitcoin would go even after the great bull run of 2013. There were years of sideways price action and consolidation before any more tremendous price movements. From Bitcoins $151.21 low of January 14th, 2015, price would rise nearly another +13,000% to a new all time high of $19,524.22 (all price action documented by Bitstamp). This price movement occurred after a prolonged one thousand sixty-eight days peaking in price on December 17th, 2017. 

Similar to the run up of 2013, the run up of 2017 featured several major pullbacks with varying ranges and durations. There were four notable pullbacks as Bitcoin trekked through new territory. Each new all time high along the way to the ultimate high of the rally came with accompanying retraces in price action. 

The overall timespan from the high of 2013 to the high of 2017 took one thousand, four hundred and seventy-nine days. 

From the peak of 2017’s bull run Bitcoin witnessed a price drop of -84.57%. Once again spectators were eager to come rushing to the scene to announce Bitcoins death once and for all! 

The bull run of 2017 welcomed many new investors and spectators to the cryptocurrency space. With this massive inflow of new users came the influencers, both positive and negative. The 2017 bull run also paved the foundation for many scam coins to make a rise by promoting massive gains in short time spans. Amongst this time was the birth of many different cryptocurrencies, some of which are truly dead and gone. Many of them are still around today and being traded with sustainable volumes. 

Bitcoin Bull Run of 2021

It isn’t fair to take measurements of this most recent Bitcoin bull run to be quite honest. We will never know how things can turn out until after they happen. Using the price action history we have available to us we will try to measure this bull run. 

From the December 16th 2018 low of $3,035 price moved to a new all time high of $64,902.54 for an increase of +2.048%. That’s a tad short from historical percentage ranges. This data is all that we have to work with so far. 

We can take note of three major pullbacks along the course of this bull run. We have highlighted them in the photo below. 

From the peak of this bull run price has fallen -52.55% giving us our largest pull back so far. If we use the span of time from the 2013 peak to the 2017 peak and measure out from the 2017 peak we can project a completion date for the current Bitcoin bull run. Happy New year! In the photo below we can project the bull run end date to January 1st, 2022. This is indicative by observations of previous price action history. This would imply that we are one hundred and sixty-five days (give or take) from the next bull run peak. 

Looking back at the previous bull runs, the greatest price movements were observed in the last one hundred and sixty-five days. 

As we have stated before, there is no way anybody can be certain as to what Bitcoin will do or when it will do it. We can study price action history but that is not always indicative of future results. The case for the current bull run to continue is strong, but it is currently teetering on a pivotal price point. Time will tell what direction we are headed. To stay up to date with Bitcoin price analysis visit our website.

By viewing any material or using the information within this publication you understand that this is general education material and you can not hold any person or entity responsible for loss or damages resulting from the content or general advice provided here. Trading cryptocurrency has potential rewards, but also potential risks. You must be aware of the risks and be willing to accept them in order to invest in the markets. Only trade with funds you can afford to lose. This publication is neither a solicitation nor an offer to buy/sell cryptocurrency or other financial assets. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed in any material on this website. The past performance of any trading system or methodology is not necessarily indicative of future results.

Written by Edward Gonzales © Crypto University 2021

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