Investors in Bitcoin are waiting for a repeat of the 2017 rally. According to analysts, a number of indicators show that the first cryptocurrency is preparing for a new rally, which will be similar to the 2017 crypto boom.
Bitcoin embarked on a sad journey, dropping from a record high of $ 64,863 to $ 30,000 on April 14. As expected, the leaders of the altcoins also followed Bitcoin and we witnessed a sharp drop in the market. There are many reasons for this decline. What’s more curious about the reasons, however, is how to go the path from now on.
In this context, the dominance of the Bitcoin market – an indicator monitored by many analysts – has reached a critical level. The reason the current level is called critical is because a table similar to the 2017 market has appeared. For comparison, we can say that the Bitcoin dominance chart currently looks the same as in the previous part of 2017. Before the market fell, BTC dominance declined fairly steadily to below 40%. However, since then it has grown by more than 43%.
If the same pattern repeats itself again this time, then the market is likely to be the equivalent of the summer of 2017. It is worth remembering, however, that there is no guarantee that this model will be reproducible.
There are many differences between 2017 and today, especially in the existence of institutions. It is difficult to predict to what extent these differences will affect BTC dominance patterns compared to what was observed in 2017. If interest in BTC continues and there is no major bad news about cryptocurrencies, there is still the possibility that the cash flow model will re-emerge.
Although the chances of repeating the 2017 record are slim.
Factors holding back the growth of Bitcoin
The first major deterrent is futures. Three years ago there were no derivatives on BTC, and now any rise and fall in quotations smoothed out by the presence of deferred deliveries. And the greater the turnover of futures trading, the more smoothly the price of BTC will change.
The second factor preventing the explosive growth of BTC is the lack of a “wow effect” among the population. Four years ago, “only a small handful of IT specialists knew about cryptocurrency”, and in 2017, Bitcoin became known and less dedicated. Then this led to an uncontrolled increase in investment, but now there is nowhere to take such an effect.
In addition, 1000 Bitcoins, which had been inactive for 10 years, came into motion. In the community, this may raise concerns about the start of the “large-scale sale” of BTC.
Many analysts questioned the possibility of a repeat of the 2017 rally. They consider a smooth rise in prices to be more likely.
Another reason why a repeat of the 2017 scenario is unlikely. Three years ago there were no resistance levels, and now there are several of them, and upon reaching each, traders will sell coins, preventing it from continuing to grow.
Nevertheless, some growth in Bitcoin this year is still possible. Earlier, co-founder of investment company Morgan Creek Digital Anthony Pompliano turned to clients with a forecast that in 2021 BTC will rise in price to at least $ 100 thousand in 2021. But if conditions are more favorable, the exchange rate may rise to $ 250 thousand.