Bitcoin has been stagnant since reaching its last high of $68,000 in November 2021. A dip in the previous months brought the cryptocurrency to 50% lows before settling down in the $40,000 range. A quick browse of news regarding Bitcoin all shows fear, uncertainty, and doubt (FUD). These are often the signs that BTC is readying for its next leg up before eventually entering into a prolonged bear market.
A Year-Long Correction
Many believed Bitcoin was ending its recent run last December 2021, akin to the 2013 and 2017 cycles. However, one big difference this cycle is that there hasn’t been any blow-off top. The end of crypto bull markets sees Bitcoin reaching extreme highs, dragging many cryptocurrencies along with it. It isn’t unusual to see 10 to 1000x returns in a short time among lower market cap coins.
Many analysts believe that crypto is now in a lengthened state. It is mainly due to increasing mass adoption and institutional interest. It’s common for newer markets to enter this phase as more people join in. Charts show that BTC has been in a corrective phase since 2021. It’s not uncommon to have higher highs in corrective patterns, as seen with the November movement.
Zooming out shows that this bull cycle is far from over. The market has not shown any signs comparing it to the previous ends. There are also clear signs that the long-term correction is near its end, as seen in several factors:
- Declining volume
- Indicators resetting to show buy signals
- Decreasing Bitcoin supply in exchanges
- Generally negative sentiment towards crypto
- Extreme fear in the Crypto Fear/Greed Index
Elliot Wave theories also show that we have not achieved Wave 3 of this run. The third and final wave is usually the most impactful and significant out of the three. Once BTC does rise out from this correction, its move will be massive. Estimates point to BTC reaching anywhere from $150,000 to $200,000 as a cycle top.
The question remains, how long before it reaches that point? It can take weeks to months as a prolonged cycle is something new to the space. If you’re in it long-term, wait it out. When a market is fearful is also usually the best place to buy, as seen in history across all markets.
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