Is it too late to invest in Bitcoin?
Bitcoin has been making such huge gains in price since the halving in May 2020, and particularly since December, that we might be reluctant to buy now. Price is looking over-extended or overbought, but there is still room for much more growth, so don’t be put off. Time is on our side, and we can see this by looking at past price action during the same phase of the bull cycle in 2017, after the last halving. If we look at the weekly chart for a macro perspective, we can see the way that price played out over time. For example, in the last bull run to new ATHs (all time highs), the price of bitcoin made its biggest gains during the last 5 weeks of the parabolic pump to $20k. Despite climbing all of 2017, the biggest gains of around 230% came in November and December of that year.
Past price action does not presume future action but it helps to see the trends. Theoretically, the bitcoin price will still be pumping for the rest of 2021. We are only in February now, so have 10 months of price gains to look forward to, if the last cycle is anything to go by. Obviously, this time is different though. We now have unprecedented massive institutional investment by the likes of Elon Musk and Tesla, as well as mainstream adoption by PayPal and certain banks.
This could therefore imply that the coming price pump will be even more massive than it was four years ago. Back then the weekly RSI only ever went as high as 89 at its peaks. This year the same weekly RSI has already topped that at 95.It did however reach beyond 95 in 2013. In other words there is more buying pressure now than back in 2017. With all the buying power of those big institutions, liquidity is scarce and price is rising like never before.
Therefore the theoretical target of $100k is actually very conservative in my opinion. We are already only one doubling away from it, so we could theoretically see even more stratospheric price levels being attained. It’s impossible to say without speculating wildly, but anywhere form $150 - $400k is possible during this current bull cycle. This is just my opinion based on technical analysis and sentiment.
And with the last 5 weeks in the 2017 price pump bringing the biggest gains of 2.3x, I personally feel confident that bitcoin will climb in value all this year, until December. And considering the greater adoption now, perhaps even into 2022. And in those last days of the pump, we are still able to make massive gains within weeks.
And the altcoins – all the other new cryptocurrencies that were around in 2017 – they peaked in the month after bitcoin. Money moved out of bitcoin when it topped and into the alts, which then had their turn to go parabolic. This could well occur again like clockwork in the cyclic nature of the cryptocurrency ecosystem.
During the 2017 bull cycle, the bearish months were March, June/July, September, and one week in November, where the price fell to the 13 or at worst 21 weekly MA (moving average) only to bounce back up once more. So far this year price has been nowhere near the 21 weekly MA. In fact the last time price dipped that low was in September, about 5 months ago. Since then we have only had two bearish weeks – in January – and even then price didn’t even dip as low as the weekly 13 MA.
In my opinion, based on technical analysis of the weekly chart, bitcoin is looking more bullish this cycle than it did 4 years ago back in 2017. Therefore I am confident to buy in right now, as price breaks above $50k and makes constant new ATHs (all time highs). There may of course be the occasional dips, as we saw in 2017, back down to the 13 or 21 weekly MA, but they may well be less that before. The sentiment is so bullish globally for bitcoin – like never before.
When someone like Elon Musk and Tesla buy $1.5 billion worth of bitcoin just a week or two back, around $45k, we can be absolutely certain that price is still set to sky-rocket. These whales are not going to take risks with their billions. They are obviously certain of further price pumps.
To conclude, price will still pump all year long, in bitcoin and even longer in altcoins, and buying in now is the easy part. The hard part is when to take profit and sell. No one can time the top with certainty. We can look at the weekly RSI, but it simply remains overbought for weeks on end, while price keeps climbing. Indicators are not clear enough to call the top.
It will be up to you when you want to sell and take profit. Or perhaps these whales like Tesla won’t even be selling in this cycle. They may actually be thinking longer term, and “hodl” for another 4 years, all the way until the next bull cycle, after the halving of 2024. In that case price may well correct for a year or two, but not to the extent of the past cycles. We are in a new era of bitcoin adoption so we can’t expect price to follow past trajectories. Strong hands will be wise to “hodl” all the way to 2025/6 at this rate, when price could actually move up to the $1 million mark.
This makes buying in now at $50k still a bargain. It all depends on a long term macro perspective. Just remember to keep your feet on the ground as your reach for the moon with bitcoin and cryptocurrency. This is the place where miracles are mined.
Posted Using LeoFinance Beta
