The #Nasdaq, which plunged in value following both the #dotcom bubble and #financial crisis, more than doubled in value in the following five years of #post-bubble #recovery. Like the Nasdaq, #bitcoin could recover #rapidly in the #medium-term, #analysis suggests.
The #Nasdaq more than recovered from both the #dotcom bubble crash and the financial crisis. | Source: #Yahoo Finance
With the #200-day moving average of #bitcoin reversing its trend for the first time in 16 months and various technical #indicators demonstrating a positive near-term trend for the asset, many industry #executives and #investment firms like #Pantera Capital believe #bitcoin has bottomed out.
IF $3,122 WAS THE #BOTTOM, #BITCOIN IS EN ROUTE TO A #STRONG RECOVERY
As suggested by #Bloomberg’s emerging #markets analyst Michael #Patterson, if #bitcoin found its bottom at $3,122 in December 2018, the #dominant #cryptocurrency may be en route to a strong upside price #movement in the years to come.
“If Bitcoin has in #fact bottomed out, history #suggests there could be further #upside. The #Nasdaq more than doubled in the five #years after its #post-bubble low and has since reached #record highs that are well above its peak during #dot-com mania,” #Patterson wrote.”
Since hitting its #12-month-low, the bitcoin price has #rebounded to $5,000, recording a staggering 60 percent #increase in value within less than four months.
Bitcoin is up 60 percent since December. | Source: CoinMarketCap
Previously, former International #Monetary Fund (#IMF) economist Mark #Dow said that bitcoin #investors should head for the exits if the asset fails to recover to the $5,000 to $6,000 #region, as it would lead the asset #vulnerable to a potentially large #downside #movement.
WHAT MAKES ANALYSTS #CONFIDENT BITCOIN FOUND ITS #BOTTOM?
Earlier this week, #economist and global markets analyst Alex Krüger said that whether #bitcoin has reached its #bottom at $3,122 or not is not up for #debate.
Purely based on #technical #indicators and data, Krüger emphasized that when the bitcoin price crossed $4,200, it broke out of its 16-month #beartrend.
He said:
“The #crypto #bear market has been over for three months now. #BTC breaking above $4,200 will mark the end of the bear trend that started in #January 2018. Going to miss this big #fellow.”
“This is not a #call. Not a matter of #aging well or not. A break above 4200 #technically ends the bear trend that started Jan 2018. Facts don’t care about #opinions. If strong selling #resumes later on, that would represent a different #trend.”
Moreover, #fundamental #analysts have said that there exist #billions of dollars waiting on the #sidelines in the #cryptocurrency market to be #allocated to crypto assets in the #future.
Mati Greenspan@MatiGreenspanNearly $3 billion ready to flow into #BTC and #alts.
Jonathan #Habicht@HabichtJonathan
I keep hearing that we need new money to get back to ATH, but think about all the #money parked in #Tether and other stable coins. #These are people who never #actually left #crypto.
Also an #interesting #metric to watch.
The #caution of #strategists in the financial #sector is that in the 1990s when Japan’s #Nikkei plunged during an #intense #correction, it struggled to recover until 2009.
However, it is #difficult to compare the price trend of bitcoin and major #stock #markets because of contrasting #environments. As seen in previous bull runs of the #cryptocurrency market, #cryptocurrencies tend to move in #cycles. When the market is on an #upside trend, parabolic #movements are often spotted. When the market #initiates a #downward movement, it often suffers #intensified volatility.
BITCOIN MOVES IN SHORT TIME #FRAMES
Thomas #Lee, the head of research at #Fundstrat Global Advisors, said that #bitcoin tends to record its biggest gains in a #10-day time frame of every year.
Thomas Lee@fundstrat1/ CRYPTO
Definitely a #positive #development that #Bitcoin is now above its 200D mov. avg.
–Many consider P>200D as sign of $BTC in positive trend
–BTC acts significantly better P>200D, a win-ratio of 80% vs 36% when P<200Dsource: data scientists @fundstrat_ken @AlexKernA
Thomas Lee@fundstrat2/ Reminder that BTC generally generates all of its #performance within 10D of any year.
–ex the top 10 days, BTC is down 25% annually since 2013 pic.twitter.com/zoEocEEZvu
As such, the way #bitcoin and the rest of the #cryptocurrency #market behave in terms of short-term price movement is #drastically different than how major markets such as the #stock market of #Japan moves.
Industry #executives remain #confident that bitcoin has established its #bottom because of the level of #activity in the #cryptocurrency and #blockchain industry across all leading markets including the U.S., #Japan, and #SouthKorea.