Bitcoin Still in a Bull Market
I am seeing many are starting to say that we are in a bear market and the top is in. There are also many who are uncertain whether we are in a bull or bear market.
Based on my personal experience, when you are uncertain whether you are in a bull or bear market, it is quite safe to assume that the top is not in.
When Bitcoin enters a bear market, you just know it.
When Bitcoin put in its local top at 64k in April 2021 and it crashed from 61k to 51k, many altcoins momentarily lost 40+% in just a couple of hours. When you experience that you just know that something is not right. However, both for the 2017 top and 2021 local top, Bitcoin still recovered quite a bit and there was another epic alt season. For 2017 bull run, it was the first two weeks of Januarary when XLM, XRP, QTUM, NEO and all these new ico boom coins put in massive gains in a week. Even in May 2022, we had an epic alt season where again, all these 2017 coins 2xed in a week while ETH basically 2xed in 2 weeks, which is also what happend in Jan 2018. When Bitcoin’s bull market ends, the crypto market still goes on another alt season bull run.
Also, for Bitcoin to enter a bear market, we need serious liquidations that happen in just a few hours, damages so serious that exchanges would be temporarily unaccessible. This time when we dropped from 69k to 56k, these liquidations happened too slowly. If we had dropped from 69k to 56k in a single day, then I would have also thought that maybe we do have a double top. However, this happened across about a 2 week time frame. In 2013, Bitcoin lost 50% of its market cap in just a matter of hours, and that marked the beginning of Bitcoin’s bear market, though the price still recovered quite a bit due to a dead cat bounce. People could say that this market could be different, but remember even in April 2021, Bitcoin lost 10k in just a 3 ~ 5 hours, not in a 2 week time frame, when it dropped from 61k to 51k. Thus, unless we have a Bitcoin price correction of at least 15% that happen in just 3~5 hours, I think we will not enter a bear market.
There are also a few technical reasons why I believe we are still in a bull market. Back in late September, we tested and held the 20 weekly moving average at around 40k. Bitcoin has never fallen below its last tested and held 20 weekly moving average price during its 10+ year history. Thus, if the same pattern plays out, we know that Bitcoin will not go below 40k ever again. Now, suppose we are in a bear market. Then the lowest we can go down to is 40k, which only gives another 30% correction from here. Also, Bitcoin usually goes on a bear market for a year, so we somehow have to spread out that 30% drop in one year time frame, which is very unlikely as 30% change in one year time frame would be what stock markets would easily do these days. We need at least a 60 -70% drop to call it a crypto bear market.
Also many are calling that we might drop to 51k to test and hold 20 weekly moving average again. What I have personally noticed is that 20 weekly moving averages only gets tested and held when we have a serious drop. Before we tested and held 20 weekly moving average in September, we had another 10k drop that happend in a single day where Bitcoin dropped from 53k to 43k and liquidated around 3 billion usd long positions. Second to last time 20 weekly moving averaged was tested and held was in September 2020, where once again, Bitcoin dropped from 12k to 10k in two days, which is a 20+% drop in 48 hours. Thus, I do not think we will go down to 51k. As I mentioned 2 days ago, I think 55k is the bottom, and I think we quickly reclaim 60k, probably within a week from now.
I am holding my portfolio. If somehow we are in a bear market, I will still just hold because I don’t mind Bitcoin dropped another 30%. I don’t think I could bear a 60% Bitcoin drop as that would pretty much wipe out all of my alt coin gains with Bitcoin going down to 20 to 10k ranges, but I think I can bear a 30% drop as worst case would be my portfolio will probably be just cut in half in terms of value.