The world’s most valuable cryptocurrency, Bitcoin, is now in line to recover most of its lost price value in the last couple of months as analysts predict a reversal in price movement should it continue to trade above its November descending trendline at $39,000.
Bitcoin entered 2022 without fanfare as it consolidated in an upswing trend before the new year entry. BTC’s initial entry into 2022 continued its slow upward trend that saw it reach a high of $47,875 before its rapid descent to below $40,000 in the first ten days of January.
The poor performance has undermined the crypto’s prior moon run in late November that saw it hit an all-time high of $69,000 as it leveraged on the surge to gather momentum for a further bullish run. However, it fell short as it unexpectedly reversed to trade below its 200-days small moving average of $39,00.
Bitcoin’s Faint On-chain Presence
In its recent publication, on-chain analytics firm Glassnode has reported Bitcoin’s on-chain activity data. The report shows that there is next to no activity fielding BTC on various blockchain networks.
Further analysis by the analytics firm reveals little to no Presence of small and medium-term holders in the industry. Bitcoin’s current HODLers and traders in the crypto market primarily consist of institutional funds and long-term holders. The net negative price action of the mother coin this year, mirroring the year end’s low price, has served as a major factor that has discouraged retail players in the market hence their absence from the crypto market. The Retail players consist of investors and traders in the industry who stake their lot when there is a potential price hike or a price surge; they are currently out of the picture.
New Price Pattern Emerges
In light of all the hubris in the face of Bitcoin’s future development, a new pattern has emerged. In the 2016/2017 growth phase of the leading cryptocurrency’s growth, it experienced a significant and sustained bull race that leveraged the sudden increase in the constitution of new entities. The bull run came to a stop after BTC’s price peaked in a period that saw the crypto field an all-time high hype regime with its fame increasing exposure. The same price action was mirrored in March 2020 following the token’s 2016/17-period movement cycle from a low to peak amidst hype in February 2021.
This recurring overall growing cycle is what Glassnode calls the ‘bear market growth channel’ on-chain analytics.
Glassnode report stated that while Bitcoin’s price continued to experience a downtrend and the presence of a bearish gloom is abundant in the crypto market space, it is a repeat of 2016/17 and the 2018/19 bear market growth channel’.
BTC Bull Market To Take Spotlight
New entities continue to balloon, even though said growth is slow and easily overlooked; it should be noted that despite bearish seasons, more and more users and investors are still injecting capital into the Bitcoin market. Summarized firm Glassnode’s analysis report is the almost certain bounce back of BTC’s bull market to match patterns that it previously fielded in the past in the crypto market.
A repeat of the 2019 pattern of Bitcoin’s on-chain activity surge that saw it gain price momentum for a short period resulted in a shortlived bull run is currently in play in the crypto market. A similar pattern has been noticed in August, September, and October. Glassnode believes that the mother coin is currently emulating the same patterns.
Should the market gather enough momentum and field enough investors, it just might turn the tide and moon to its previous all-time high (ATH) and grow further to analyst projections of $200,000 at the end of the year.