What Do Previous Bitcoin Rallies Teach Us About Where 2021 Price Will End?

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Last Updated on 22 October 2021 by CryptoTips.eu

Jeroen Kok

Jeroen is one of the lead copywriters on Cryptotips.eu and discusses all recent events in the crypto market. This includes news updates, but also price analyzes and more. He developed his passion for cryptocurrency during the bull run in 2017. He has learned a lot since then. The combination of cryptocurrency and creative writing is perfect for Jeroen and an excellent way to share his knowledge with a wide audience. Find me on LinkedIn / jeroen@cryptotips.eu
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Bitcoin has had quite the year again. From a value of $20,000 at the beginning of the year it rose all the way up to $64,000 by end of April. Then followed the Chinese ban, the ESG crowd and an attack by classic finance.

Two months later it had retraced by some 50% and world media was sure it was bound to crash. As we enter the final stages of the year, Bitcoin has once again put a new all-time high on the board.

Historical analysis now indicates that Bitcoin’s next major bearish correction (and yes, there will be one) will not follow the classic pattern of an 80% retracement from its peak. Based on historical data, its magnitude will theoretically be smaller than the previous one.

The price of Bitcoin recorded sharp declines to more than 83% between 2013 and 2015, and between 2017 and 2018, after reaching an all-time high of $ 1,111 and $ 20,089 respectively at the time.

The bull runs that took place in 2019-2020 and 2020-2021 were followed by major corrections of respectively 61% and 54% from the peak, showing that the retracement after each new all time high tends to reduce.

Advertentie.

Bitcoin volatility: smaller post-halving rises and falls

But if the magnitude of declines tends to decrease over time, so would the magnitude of Bitcoin price rises. According to the principles of Stock-to-flow model and by studying the impact of successive halvings on the explosion in the price of Bitcoin, one could theoretically claim that Bitcoin would thus reach $100k before the end of the year, giving everybody who gets in now another 30% gain. Then again, don’t take our word for it, but always do your own research.

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