Bitcoin’s case of Back To The Future: 2013 already knew this would happen…
With every passing day, Bitcoin is becoming more and more unpredictable thanks to its volatility. The coin has been moving opposite to the hopes and expectations of investors and analysts alike. After a decent rise between June 22 and 24, the coin closed at the lowest it had in the last 3 months. Even though it did make a slight comeback, it also brought this question to everyone’s minds – Will Bitcoin break above the $40k level soon? And when would that be? The answers to the future lie in the past of BTC’s movement.
What happened in 2013?
8 years ago when Bitcoin was worth merely $100, the coin broke down in the middle of its bull run. BTC took a small recess before resuming its upward movement. Why this is significant is because the bull cycle breakdown took place around the middle line (black line) of the logarithmic Fibonacci growth curves. During this recess, Bitcoin tested the 0.382 (yellow line) Fibonacci level as support briefly before returning to continue its bull cycle.
At the moment, Bitcoin is repeating that movement. The king coin was testing orange Fibonacci level as resistance before it broke down in May, which led to the coin falling below the middle line. Furthermore, the month of June is closing right around the yellow 0.382 level, and if positive cues come into play, the close could possibly even be above that level.
Bitcoin’s present movement is starkly similar to its 2013 movement because as of now, the coin is headed in the same direction. If you observe the 2013 and 2021 comparison charts, some consolidation in the yellow and mid-line (black) Fibonacci range can be observed in 2013. Those levels in the present prices come close to $34k-35k, which is already an established breaker level.
Where is BTC headed to next?
In order to determine that, 50 WEMA and 21 WEMA have to be observed carefully as the Moving Averages dictate BTC’s movements most accurately. Rekt Capital stated:
“50 and 21 WEMA are an important tool in assessing bull markets… As long as it’s (WEMAs) held as support, the coin proceeds further upside”
In 2013, Bitcoin held 50 WEMA as support at all times. Such was the situation in 2021 as well. The coin kept its movement consolidated within the 21 and 50 WEMA levels (ref. BTC triangular structure chart). This showed that moving forward, the price action will remain compressed within that triangular structure as both Moving Averages have been strong levels for a long time.
The coin could breakout or breakdown out of these levels, however, there is no point guessing due to the ensuing volatility.
As for the 21 WEMA, in the case of 2013, a minor breakdown was observed before Bitcoin went back to flip it into support and engage in a bull run. A breakdown can also be observed at the moment, but where BTC goes from here is what’s causing fear in the market. It is important for the coin to breakout, (as historically, a breakout results in a long-term bull market). Whereas a breakdown results in a long term bear storm (i.e. 2014-2015)
Where is Bitcoin right now?
Presently, BTC seems to be headed towards a not-so-bullish market. The coin already broke below the 50 WEMA and if the coin doesn’t flip it back into support soon, it could result in the coin engaging in the dreaded bear run.
But what K_Godel says is also a possibility,
People conveniently forget, during the 2013 cycle, $BTC suffered an ~80% correction , only to recover ~2300% by end of that same year.
Will history repeat ? pic.twitter.com/Sl5VjKYU5U
— ₭_Gödel? (@godeLives) June 25, 2021
In either case, investors need to be aware.