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A quant has pointed to the similarities between the 2017 and 2021 Bitcoin cycles, something that could hint at how the rest of this bear market could play out.
Both 2017 and 2021 Bitcoin cycles saw new lows around the 365 days since the top
As explained by an analyst in a CryptoQuant afterthe two cycles are more similar than one might expect.
The indicator of relevance here is the “draw out ATH”, which measures the percentage drop in Bitcoin’s price after its all-time high during each cycle.
Here is a chart showing the trend in this metric for the 2017 and 2021 cycles:
Looks like the current cycle hasn't gone as deep as the previous one yet | Source: CryptoQuant
In the chart above, the starting point for the 2017 Bitcoin cycle draw is in December 2017, when the all-time high of the period was set.
After this top, the price of the crypto took a sharp plunge until the decline in the ATH reached a value between 65-70%.
After reaching these shooting values, the price started to stabilize and ran sideways for about 110 days.
Then in the Nov 2018 Bitcoin’s value suddenly collapsed and continued to fall until bottoming out about 365 days after the ATH.
As for the current 2021 cycle, the top was formed last November and the price has been falling ever since. The graph shows the path this recording has taken so far.
Although the decline is not exactly the same in the two cycles, there is still a striking similarity between them.
As in the previous cycle, Bitcoin collapsed hard after the top, until the ATH’s withdrawal reached 70%.
The price of the cryptocurrency then consolidated flat, similar to the previous cycle, and around 365 days BTC hit a new low after falling in the same way as the November 2018 crash.
So far, this cycle is similar to the previous one, but it is uncertain at this point whether it will continue in the rest of the bear or not.
If it does follow a similar trend from now on, then the quant believes there are 100 days of sideways movement left (in which the cycle floor will form) before the end of the bear.
At the moment of writing, The price of Bitcoin is floating around $16.5k, down 20% over the past week.
The value of the crypto seems to have been moving sideways recently | Source: BTCUSD on TradingView
Featured image from Jonathan Borba on Unsplash.com, charts from TradingView.com, CryptoQuant.com