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Analyst Claims that the Bitcoin Bear Market is Still Far from Over
The cryptocurrency markets posted slight gains over the weekend and have recovered slightly from last week’s dip that sent most cryptocurrencies, including Bitcoin, to fresh yearly lows. Despite the current price action being seen as capitulation by some investors, one analyst claims that the crypto bear market is still far from over.
At the time of writing, Bitcoin is trading down nearly 4% over the past 24-hour trading period at its current price of $3,500. This past Friday, Bitcoin set a new 2020 low at just under $3,300 on the aggregated markets. Over the weekend, Bitcoin rose to highs of $3,650, and has been trading sideways between $3,400 and $3,600 in the time since.
Stephen Innes, the head of Asia Pacific trading at Oanda, offered a pessimistic view of the current state of the markets while speaking to MarketWatch, claiming that Bitcoin’s lack of use-cases is contributing to the persisting bear market.
“Bitcoins have gone well beyond the ridiculousness of tulip bulb mania. It’s has been a disastrous year for cryptos, and by all indication, the current bear market could go from bad to worse with no fundamental or underlying reasons…” Innes explained.
Despite his pessimism, Bitcoin is actually seeing increased adoption, and it is clear that institutions are increasingly recognizing it as a powerful asset.
Recently, Matt Hougan, the global head of research at Bitwise, explained that the entrance of major institutional investment groups, including ICE, Fidelity, and major universities like Yale and Stanford, is driving investor’s interest in regulated cryptocurrency investment funds.
“With significant positive developments on the horizon, including the launch of the Bakkt bitcoin futures exchange from ICE, the launch of Fidelity Digital Assets, and the continued movement of institutional investors like Yale University and Stanford University into the crypto space, we have seen significant inbound demand for high-quality bitcoin and ether funds,” Hougan said.
Although some analysts may be pessimistic regarding the future of Bitcoin, its increasing rate of adoption as both an asset and as a currency signal that the best is yet to come.
Altcoins Drift Lower Amidst Bitcoin Instability
Bitcoin’s increasing volatility has been a bad thing for the altcoin markets, and its latest drop has led many altcoins down 4% or more.
At the time of writing, XRP is trading down nearly 5% at its current price of just over $0.30. XRP seems to have established the $0.30 region as a level of support, and only briefly dipped below it this past Friday when Bitcoin fell to under $3,300. XRP is still trading above its 2020 low of approximately $0.24, which was set in early-August.
Ethereum is presently trading down over 6% at its current price of $91.5 but is up slightly from its recently establish year-to-date low of approximately $84. Ethereum is currently trading down nearly 60% from its one-month high of $213, which was set in early-November.
Although Bitcoin’s poor performance has led to turbulence in the markets, the entrance of institutional investors throughout 2020 may help to lift the markets back towards their all-time-high prices.
Cole is a cryptocurrency analyst based in Los Angeles. He studied at the University of California Irvine and has covered bitcoin and the crypto markets since 2020.
New Analysis Says Bitcoin Bear Market Will Continue
In This Article
Many months of plummeting Bitcoin BUY NOW market prices have investors focused on only one thing: has Bitcoin hit rock bottom yet?
After reaching a long-awaited high of over $19K USD in January 2020, nearly breaking the $20K ceiling that the Bitcoin fan club had been dreaming of for years, Bitcoin has been in a steady downward spiral for more than an entire year.
The Bitcoin bear market seems to be showing no signs of letting up anytime soon. Bitcoin dropped below $4K in mid-November and almost went below $3k by mid-December. While we did see a few brief stints where the Bitcoin prices rose to just over $4K, there have been no real indicators of recovery for an entire year.
Cryptocurrency investors, analysts, and researchers as a whole are displaying tremendous ambivalence about the whole tumultuous situation. Some strongly believe that the Bitcoin bear market is finally ending its brutal run on investors. Others are equally convinced that this uncertainty and price loss is here for the long haul, with no signs of letting up. Both camps have data, numbers, and other forms of convincing proof to back their stance.
Camp 1: Tired Bears
Analysts who believe the bear market is over and we are seeing corrections and movement toward growth are not simply making their case based on what they want to see for the betterment of their own personal investments — they cite data to back up their opinions.
For example, the Market-Value-to-Realized-Value (MVRV) ratio, created by Bitcoin analysts (and maximalists) Murah Mahmuduv and David Puell, is an indicator of current BTC price vs. BTC realized value.
When the MVRV ratio is below 1 or above 3, prices tend toward instability. The MVRV premises its predictions on the fact that most investors will not want to sell at a loss. At this time, the average loss upon selling is close to 31 percent. Therefore, MVRV indicators show that the market is actually moving toward stabilization.
Other indicators, such as the NVT ratio and the logarithmic rejection support these claims. They show similar patterns that show Bitcoin has already hit bottom and is stabilizing. The NVT ratio is the total BTC supply divided by daily value, and it is clearly moving up. It showed similar patterns in 2020 and 2020 as the market went low and then stabilized.
Camp 2: Bears Remain
However, others argue that the market is in the middle of its bottom, and even if the worst is not yet to come, we are still in the throes of some pretty tough times for Bitcoin. These analysts have data to back up their points as well. However, anyone who has been in finance for any length of time is aware that data is easily manipulated and can be used to back pretty much any argument imaginable.
For example, many analysts factor in the ongoing and well-deserved bad press Bitcoin has had over the past 12 months as they make market predictions. These researchers turn to issues such as hacking, infighting, continued hard forks In the crypto world; a ‘fork’ is essentially a change in the protocol of a blockchain. Since cryptocurrencies run on. More , and general discontent within the market as reasons for some of the price drops Bitcoin has seen.
They also lay out strong solutions to these problems. Most analysts would agree that continued widespread adoption and awareness, increased functionality, and institutional acceptance all need to occur in order to see Bitcoin price increases. They would say that while we are on this road, it will take time for these factors to take effect.
Other factors cited by analysts who believe the bear market is not yet over are more data-driven. For example, Bitcoin influencer Willy Woo uses the stability of volume of coins actually changing hands as an indicator that Bitcoin is still at the bottom.
In order for the bottom to be in, the volume of coins changing hands becomes steady, currently it’s very erratic, synonymous with middle of the bear detox. (In this chart I’m tracking the volatility We can describe volatility as how much the value of an asset changes over a given time. A volatility index. More of on-chain volume). pic.twitter.com/aVYI1Ortxh
By evaluating on-chain volume only, transactions are what is being analyzed. Also, by removing large scale addresses such as exchanges it is possible to normalize the data. This removes any potential skews from market manipulation buying and selling tactics.
Awareness Must Grow
What both sides do agree on is that Bitcoin and cryptocurrency, in general, would really benefit from increased awareness, throughout society in developed nations as well as globally. They agree that the current state of Bitcoin is subject to so much change simply because at no point in history has a potential global currency ever come out of nowhere. It has taken hold rapidly, but many, many people still do not even know what Bitcoin actually is. Therefore they cannot consider investing in it, and certainly, don’t use it for daily transactions.
Everyone agrees that new buyers needed. Bitcoin is currently experiencing a glut of the same hodlers When traders think about cryptocurrencies, they focus more on how they can profit from the price swings. But, what happens. More , traders, and exchanges. Change is needed, and change will lead the upward momentum to higher prices and, eventually, even greater adoption.
Do you think the Bitcoin bear market is finally dead? Will we start to see more regular moves to the upside? Let us know in the comments below!
Bitcoin’s Bear Markets: A Guide to Bitcoin’s Crashes and Comebacks
Bitcoin’s bear market . You’ve likely been hearing this phrase for most of 2020. Perhaps you aren’t exactly clear on what a bear market is. Maybe you’re not sure how to identify one. More importantly, you want to know when this bear market will be a done deal. This article will provide the bitcoin bear market info you’re looking for.
What Exactly Is a Bitcoin Bear Market?
Bear market definitions may vary, depending on who’s got the mic. Here’s a couple of popular interpretations:
- A 20 percent decline from the most recent all-time high.
That’s a useful figure, however, some technicians add an additional qualifier:
- A 20 percent decline from the most recent all-time high, with a duration of two months or greater.
Using the first definition, Bitcoin (BTCUSD) officially entered a bear market on December 21, 2020, when it closed at 15,632.12. The decline was extremely fast, occurring only four days after reaching its all-time high (ATH) of 19,870.62. Many other cryptos experienced similar descents into bear markets, confirming the sell-off’s broad-based nature.
Applying the second, more specific definition yields a different result, however. Using this second interpretation, Bitcoin entered a bear market on February 17, 2020 (two months after the Dec 17, 2020, ATH). Its closing price was 11,097.21, far below the broad-definition, 20 percent decline figure of 15, 632.12. Bitcoin remains in a long-term bear market, trading at 4,167.00 as of this writing (December 24, 2020).
Bitcoin Bear Market Stats
Here are my chart-based calculations for each Bitcoin bear market going back to 2020. I’m using the broad definition of a 20 percent decline from the most recent ATH. Time duration and maximum percent loss are included. The time needed for Bitcoin to move from the bear market low to the next ATH is also included. Dates are calculated on a week-ending (Saturday) basis.
Let’s start with the most recent bear market:
December 17, 2020, to December 15, 2020
Duration: 363 days
Max drawdown: (84.00) percent
Time needed until next ATH: To be determined
September 2, 2020, to September 16, 2020
Duration: 14 days
Max drawdown: (40.12) percent
Time needed until next ATH: 42 days
BTCUSD, weekly: Bitcoin’s four most recent bear markets. Some recover very quickly, while others can take months or years to make a new all-time high. ‘MDD’ refers to maximum drawdown. Image: MotiveWave Ultimate.
June 17, 2020, to July 15, 2020
Duration: 28 days
Max drawdown: (39.40) percent
Time needed until next ATH: 21 days
March 11, 2020, to April 15, 2020
Duration: 34 days
Max drawdown: (36.74) percent
Time needed until next ATH: 14 days:
BCHUSD, 3-week chart: Bear market #2 was a very fast-moving affair. However, bear market #3 did much more technical damage. That’s why it took an incredible 1,106 days to make a subsequent new ATH after the low was in place.
November 30, 2020, to February 22, 2020
Duration: 84 days
Max drawdown: (92.62) percent
Time needed until next ATH: 1,106 days
April 13, 2020, to July 6, 2020
Duration: 84 days
Max drawdown: (75.41) percent
Time needed until next ATH: 119 days
BCHUSD, weekly. Bitcoin’s 2020 bear market was severe, slicing off 94 percent of its value. Once the low was made it took nearly 500 days for it to make a new ATH. Image: MotiveWave Ultimate
June 11, 2020, to November 19, 2020
Duration: 161 days
Max drawdown: (93.76) percent
Time needed until next ATH: 476 days
A Wide Range of Outcomes
Statistical analysis is more reliable when at least 30 datasets are included. Don’t attempt to read too much into this very small, seven-sample bear market evaluation. That said, here are some interesting Bitcoin bear market stats for your consideration:
Smallest drawdown: (36.74) percent
Largest drawdown: (93.76) percent
Longest drawdown: 363 days
Shortest drawdown: 14 days
Shortest time between max drawdown and the next ATH: 14 days
Longest time between max drawdown and the next ATH: 1,106 days
Average drawdown percent: (60.76) percent
The average duration of drawdown: 110 days
The average time between max drawdown and the next ATH: 296 days
Data source: CryptoCompare via MotiveWave Ultimate
The recent bear market (Dec. 2020-Dec. 2020) needed 363 days to go from its ATH to its ultimate low. That’s more than three times longer than average. This suggests that Bitcoin sellers have been far more aggressive than buyers.
The nearly 93 percent decline witnessed between November 2020 and February 2020 took only 84 days to complete. Once the bottom was in place, it took a whopping 1,106 days for Bitcoin to achieve a new ATH (March 2020). Bitcoin ’s nearly 94 percent decline in 2020 took nearly 500 days before reclaiming a new ATH. The NASDAQ 100 index (QQQ) decline of (83.6) percent (March 2000 to October 2002) required an incredible 16.75 years before being able to make a new ATH .
After an 83 percent decline (or greater), expect to wait a while before witnessing a new ATH. Part of the reason for this is that the investors who suffered major losses fail to return to the market once the trend reverses higher.
Therefore a new group of enthusiastic Bitcoin investors needs to step in to take their place before a new bull market can begin. This can take years, depending on investor sentiment and economic conditions.
Forecasting the Next Bitcoin ATH
It takes an average of 296 days for Bitcoin to travel from a bear market low up to a new ATH. Adding that figure to the recent bear market low date of December 15, 2020, suggests that a new ATH won’t be seen until around October 8, 2020. However, if it takes 1,106 days (the current record) to make the next ATH, you might anticipate December 2021 to be its possible ETA. More likely is that the next Bitcoin ATH will arrive somewhere between 296 and 1,106 days after December 15, 2020. Start marking your calendars!
However, if the recent lows of December 15, 2020, fail to hold, then all bets are off. A new set of calculations will need to be run for the bear market decline that began in December 2020.
BTCUSD, daily: Bitcoin is still trading below its all-important 200-day simple moving average. The MACD signal lines are still firmly in bearish mode. Image: TradingView
Bearish Trend vs. Bear Market
The bear market definition is certainly useful. However, it may not provide you with a complete array of in-context, tradable technical knowledge. For example, what if Bitcoin makes a new ATH in late 2020, drops by 25 percent in three weeks (technically, a bear market) and then sets up a picture-perfect swing trade buy setup?
Is that a no-touch trade setup, simply because it occurs within the textbook definition of a bear market ? No, of course not. It might even turn out to be a big winner, especially if the price is above its 200-period SMA. That’s why you need far more than a blunt-force definition to help you determine not only the market’s bias (bull or bear) but also its trend . Here are some highly-specific technicals that can help you determine if Bitcoin’s trend is bearish:
- The closing price should be below the 200-period simple moving average (SMA).
- The moving average should be sloping downward, confirming a strong bearish bias.
- Bitcoin should also be making a series of lower swing highs and lower swing lows.
If you see all three of those qualifiers on your Bitcoin chart, a strong bearish trend is in control. Most likely, the price will be trading at least 20 percent below its recent ATH any time they’re all in agreement. You should not be looking to take long trades at all.
However, you can choose to short rallies, short breakdowns or even choose to wait the market out. Patiently waiting for a bear market to end may be the safest strategy for newer traders and investors.
BTCUSD, weekly: The series of lower swing highs and lower swing highs confirms Bitcoin’s current downtrend. However, the key 200-week simple moving average recently acted as an important reversal point. Image: TradingView
When Will This Bear Market End?
Here are some clues to help you determine when this long bear market will be complete:
- The weekly RSI (14) needs to make two consecutive closes above 50.
- On the daily chart, look for Bitcoin to close back above its upward-sloping 200-day SMA.
- Bitcoin’s weekly chart needs to trade above its upward-sloping 50-week SMA.
- The weekly chart MACD histogram and MACD signal lines need to be above their zero lines.
- A series of higher swing lows and higher swing highs must print on Bitcoin’s weekly chart.
- The monthly bitcoin chart should also be trading above its 10-month SMA.
When you see most or all of the above in place, Bitcoin’s bear market will be over.
Analyst Claims the Bitcoin Bear Market is Likely Over as Bullish News Abounds
After a relatively long period of choppy trading within the lower-$5,000 region, Bitcoin (BTC) has finally incurred another influx of buying pressure that has allowed it to surge higher, with the key resistance level of $6,000 looming just over the horizon.
Now, one prominent analyst who has called previous Bitcoin crashes believes that the cryptocurrency is currently in the midst of a long-term recovery pattern that will ultimately allow BTC to surge significantly higher throughout 2020.
Bitcoin Surges to $5,800: Is the Bear Market Over?
The recent series of price surges that have allowed Bitcoin to surge from its late-2020 lows of roughly $3,200 to its freshly established year-to-date highs at its current price of $5,800, may be the final nails in the coffin that have brought about an end to the persistent bear market.
Rob Sluymer, a technical strategist at Fundstrat, has built a track record of accuracy when it comes to the crypto markets, as he has called previous drops with precision, including when Bitcoin slid from the $6,000 region to the lower-$3,000 region in late-2020, when he explained that the crypto had “significant technical damage” just weeks prior to the major drop.
Now, in a recent note, Sluymer explained that he believes Bitcoin is currently in the early-stage of a long-term recovery that will continue on throughout the year.
“Use pending pullbacks to continue accumulating Bitcoin in the second quarter in anticipation of a second-half rally through
6,000 resistance,” Sluymer explained, further adding that he sees BTC’s recent price action as “the early stage of a longer-term recovery developing.”
Furthermore, he also noted that this does not mean a drop back into the $4,000 region is out of the cards, but he does advocate for using any additional drops to accumulate larger positions.
“While it’s premature to conclude Bitcoin will not retest support near $4,300, we would encourage traders and investors to remain focused on the bullish longer-term technical profile developing… Bottom line: use recent weakness to accumulate,” he said.
Bullish News May Fuel Further Price Gains
The crypto markets have been witnessing an influx of bullish news that has drastically shifted sentiment for the better and may be fanning the flames that are driving these recent price gains.
Earlier today, news broke that Facebook is in the process of building its own cryptocurrency-based payments system, a development that had long been anticipated by those in tune with the crypto industry.
According to the Wall Street Journal report, the social media giant has been recruiting a number of financial firms and digital merchants in an effort to build a new system that could undermine current payment methods – which mainly consists of credit cards – and allow the company to increase their revenue by reducing the processing fees associated with other forms of payment.
This news is emblematic of the growing corporate adoption that cryptocurrencies, and Bitcoin in particular, have been facing over the past year – despite the dreary price action.
As Bitcoin continues to climb higher and more companies foray into the nascent markets, it’s beginning to look more likely that 2020 will prove to be another great year for the crypto industry as a whole.
Be sure not to miss any important news related to Cryptocurrencies! Follow our news feed in the way you prefer; through Twitter, Facebook, Telegram, RSS or email (scroll down to the bottom of this page to subscribe). Bitcoin never sleeps. Neither do we .
Disclaimer: This press release is for informational purposes only, the information does not constitute investment advice or an offer to invest. The opinions expressed in this article are those of the author and do not necessarily represent the views of CriptomonedaseICO , and should not be attributed to, CriptomonedaseICO .
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