Bitcoin's Future: Will the Bull Run Continue or Face a Setback?
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Chapter 1: The Current State of Bitcoin
Recent events in the Bitcoin marketplace have left many wondering if the recent downturn signifies the end of the bull run or if it's simply a temporary setback. Last week, Bitcoin seemed poised for a breakout, forming a promising cup and handle pattern that suggested a potential rise past the $65,000 mark.
The enthusiasm was palpable as Bitcoin made several attempts to breach the $59,500 resistance. However, the bears proved resilient, pushing Bitcoin back down to the $55,500 level.
After a series of intense discussions and live-streamed updates, Bitcoin bulls sprang into action. They established a double top at $58,200, momentarily shaking the bears. Yet, as Bitcoin's momentum faltered, the bears regained their strength, causing Bitcoin to tumble to $53,000—a substantial $9,000 drop from its peak.
Is this merely another correction, or have the bears landed a significant blow to Bitcoin's bullish trend?
Section 1.1: The Correction Scenario
Following reports of a $1 billion influx into the Gemini exchange, which turned out to be unfounded, Bitcoin's defenses weakened. This news, along with India's ban on Bitcoin, contributed to a sell-off, causing Bitcoin to slip below its 20-day exponential moving average on March 22.
The decline was exacerbated by the Turkish Lira's 15% drop after President Erdogan dismissed a central bank governor. As the dollar strengthened, Bitcoin faced further pressure.
Several indicators suggest that a correction is imminent:
- Bitcoin broke out of a rising wedge pattern, a bearish signal.
- The Relative Strength Index (RSI) indicated an overbought condition, typically leading to corrections.
- Historical data shows that during the 2017 bull run, there were six corrections, ranging from 28% to 39%. Currently, we seem to be facing correction number five.
For more insights on this, check out the following video:
Chapter 2: The Bullish Scenario
Despite the current downturn, a strong indicator suggests that Bitcoin may soon rebound and aim for the $75,000 mark around May 2021. Recent data indicates that long-term holders are not selling their assets, indicating confidence in Bitcoin's future.
These holders remained committed even when Bitcoin surged past $60,000 and when it fell to $53,000—a critical level where Bitcoin reached a $1 trillion market cap.
The HODL wave graph from Glassnode emphasizes that holders are sticking to their strategy, signaling potential upward movement for Bitcoin.
Interestingly, contrary to typical patterns that indicate a market top, there was a significant outflow of Bitcoin from exchanges over the weekend of March 20-21, suggesting that holders are looking to retain their assets rather than sell.
Section 2.1: Evaluating Future Risks
While some indicators point towards a bullish recovery, there are always potential pitfalls. A group of miners in China, controlling a significant portion of the hash rate, may pose a risk. They anticipate a rapid economic recovery, which could negatively impact Bitcoin, traditionally viewed as a safe haven.
The RHODL Indicator suggests that Bitcoin may soon reach a local peak similar to the one observed in 2017 before a significant downturn.
The crypto market is characterized by its volatility, oscillating between bullish and bearish phases. It is plausible that we may witness a significant correction, reminiscent of the Dot-com bubble burst.
Section 2.2: The Unexpected Visitor
In an unexpected turn of events, a mysterious figure entered the arena, drawing attention from the crowd. As the cheers intensified, the individual revealed himself to be Elon Musk, making a highly anticipated announcement: Tesla would now accept Bitcoin as a form of payment.
This revelation sent Bitcoin soaring back to life, with prices climbing to $56,800 as bulls rallied, eager for a rebound after this latest correction.
The excitement is far from over, as the market remains poised for potential growth. Will we see Bitcoin reach $75,000 soon?
Lucien Lecarme
For those interested in generating passive income through crypto, consider exploring my DeFi beginners course and subscribe to my free weekly updates on Substack. Remember, this content is not financial advice—my passion for Bitcoin is purely for the thrill of the game, not profit.