The bitcoin crash of 2014 can illuminate the downtrend of 2018 – BTC repeats the same action pattern
Has it bottomed out or are we going another leg down? Theories and predictions about it crop up every day, sometimes same person poses opposing statements so he can cover all possible options and claim “victory” and expertise. It is easy to do it in the tumultuous crypto universe, just delete the tweet where you were wrong and block people who are on to you.
However, every now and then, some of these interpretations of the market present a sound evidence, mostly historical to back their position. One such opinion of the market came from a relatively known and respected YouTuber and Twitter trader – Crypto Monk who sees a similar pattern of bitcoin behaviour in this year to the one from 2014.
In 2014, right before the Mt.Gox, bitcoin took off from $160 to $1200 and back to $103, all of that within 5 months. That is a 91 percent change in a shorter time interval.
After that, bitcoin was stranded in the $160 and $200 area before breaking out of it to attain the 2015 high of $509 and then to roughly double that to $1,173 in 2016. We know very well what happened in the year after that when the completely unchained bitcoin orbited to $19,000.
Dusky 2018 – Downtrend and Lateral Movement
The ascend of bitcoin in the period 2014-2017 was not exclusively its own merit, rather the development of the whole ecosystem of cryptocurrency and blockchain projects. Bitcoin enjoyed the position of first mover and had a constant transaction volume due to being a major on ramp from fiat.
Once entered the crypto realm, hopeful, naive and inexperienced traders moved to other coins and ICO projects, most of which were led by con artists and fraudsters. As those projects tapered off, the trust in the whole ICO market decayed, the prices of bitcoin and other altcoins went along with it. Bitcoin fell at one point to the year’s low of $5,775.
This year’s crash, as seen by Crypto Monk, mirrors the crash Bitcoin market saw in 2014. In both the cases, malicious actors wrecked the market. But once they were uprooted, legit players and projects created sound demand around the new bottoms.
$BTC on the weekly doesn't look like something about to crash to me.
If i had to compare it to the 2014 fractal, it would look like the bottoming area. pic.twitter.com/XVSZUpZQJl— The Crypto Monk ⛩ (@TheCryptoMonk) October 16, 2018
History doesn’t repeat itself but it often rhymes …
Predicting price action in a fledgling asset class still undergoing a series of price discovery corrections is undoubtedly challenging, but performing retrospective fundamental and technical analyses of the factors surrounding the previous bear cycle in 2014 to 2016 can provide clues as to what we can expect going forward.
The cryptocurrency appears to have finished another bubble cycle. But this time, the investors are different, more aware and educated than before. Moreover, institutional investments coupled with upcoming regulators are making Bitcoin a much-acknowledgable market than before.
The bottom line is that bitcoin has always bounced back from its doldrums, and with cryptocurrencies increasingly a permanent fixture in the investment and business landscape, the long-term looks bullish for the ‘strong hands’ investors able to filter out the panic of temporary momentum shifts by remaining focused on the greater rewards to come.
