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Bitcoin Holds Above $21,000 for Three Consecutive Days: Dawn of the Bull Market?
© Reuters. Bitcoin Holds Above $21,000 for Three Consecutive Days: Dawn of the Bull Market?
After blasting past $21k on the back of a positive Consumer Price Index (CPI) report over the weekend, Bitcoin (BTC) has held up above $21,000 for the last three days. It raises the question, have we come to the end of the bear cycle?
Bitcoin at $21k: Signs of the Bear Cycle’s End?
The CPI report hasn’t been the only positive for Bitcoin lately. Since the start of 2023, Bitcoin has gained 27.50% (22.7% in the last week), wiping off its FTX losses and showing signs that preceded the famous 2019 bull run.
The seven-day price chart for Bitcoin (BTC). Source: CoinMarketCap
Before the CPI report was announced, Bitcoin’s volume jumped to $40 billion. This is the highest volume recorded since January 2021. This week’s bullish candle is similar to the one formed two years ago.
Bitcoin volume chart.
Bitcoin holding above the $21k level for three days has also led to a greater volume of profits realized on-chain than losses for the first time since June 2022. It also relieves miners who have been forced to sell their BTC.
Also significantly, Bitcoin mining difficulty jumped by 10.3% on January 16th to hit an all-time high of 37.73 trillion at block height 772,128. All this happened on the back of Bitcoin’s hashrate opening the year at an ATH.
Bitcoin Mining Difficulty. Source: Coinwarz
At $21k, Bitcoin is now trading back above the realized price. For these reasons, many believe the November 2022 low of $15.5K was the bottom, and BTC will continue to rise into 2024 when its next halving will happen.
Popular trader and creator of the Stock-to-Flow model, PlanB, tweeted his prediction.
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My 2 sats on #bitcoin price:- November 2022 low of $15,5K was the bottom- BTC has crossed Short Term Holder (STH) and will rise into 2024-halving and subsequent 2025 bull market. Several on-chain signals confirm STH signal.- 2024 halving will be >$32K- 2025 bull market >$100K pic.twitter.com/0QtbeOXwsG— PlanB (@100trillionUSD) January 12, 2023
Not Everyone Thinks So
After about 13 months of going mostly downward and sideways, some analysts are still not convinced that the bear cycle will end. Popular commentator The Crypto Lemon believes BTC will fall further.
Fellow commentator il Capo of Crypto calls the recent gains the biggest bull trap he has seen. He claims Bitcoin could fall as low as $12k.
Like I've said several times, bear market show people's true colors. And in the end, market (and life) humbles everyone.12k is still likely imo.— il Capo Of Crypto (@CryptoCapo_) January 14, 2023
What Bitcoin’s Current Range Says
While the recent BTC surge has divided market analysts, what does the current price range say? Firstly, the Bitcoin fear and greed Index is now at 51/100 (neutral) – stepping out of the fear zone for the first time in nine months.
However, at $21k, BTC is currently facing significant resistance. BTC also just broke above the 1.0 mark of Glassnode’s aSOPR model.
A convincing break above 1.0 for Realized P/L Ratio has historically signaled a cycle regime shift is underway. If BTC holds above this level, we could truly say the bull run is on.
Why You Should Care
While this week’s powerful rally divides market analysts on the possible direction for Bitcoin, several metrics now seen often earmark a bullish market.
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