Bitcoin hitting $20,000 all-time highs has returned to the spotlight as BTC price action mimics the infamous surge from late 2017.
Uploading a historical chart for BTC/USD on July 9, PlanB, creator of the stock-to-flow Bitcoin price prediction model, reminded followers that current behavior was eerily familiar.
On Thursday, Bitcoin traded at $9,400, having climbed overnight to seal 24-hour gains of around 1.2%.
The strength surprised previously bearish analysts, who had assumed that Bitcoin was simply reacting to movements on macro markets and in fact had little support. As Modern Consensus reported, weak volume and several warnings from indicators added to their concerns.
PlanB evokes $20,000 BTC moonshot
Now, however, the mood was turning more optimistic. PlanB—who noted that his observation was not a prediction—fuelled speculation that further upside was now more possible.
“For historical purposes only: #bitcoin is at the same price level as 27 Nov 2017 .. it took 20 DAYS to go to $19K,” he wrote.
2017 saw Bitcoin’s rapid gains come after six months of slow grind upwards, and afterwards, a precipitous fall erased much of its progress beyond $10,000.
This time around, responses noted, Bitcoin’s fundamentals are much more solid. Its weekly relative strength index (RSI), for example, is much more managed, with late November 2017’s score of 80 signalling a reason to be cautious rather than confident.
Asked what might have triggered the run to $20,000, PlanB pointed to institutional investors and the abandonment of the controversial SegWit2X protocol change.
“B2X attack was cancelled in Nov and CME futures were launched in Dec. ‘the herd is coming’ (institutional investors) was the meme at the time,” he added.
Bitcoin futures, which paved the way for today’s burgeoning derivatives markets, officially launched exactly as the all-time price highs came into view.
Analyst targets $9,800 for short term trades
In recent months, despite a blistering recovery from March’s lows of $3,600, a genuine breakout has evaded Bitcoin. Even earlier in 2020, support past $10,000 quickly faded, with a corridor between $9,000 and $9,500 forming a longer term focus.
Unexpected events, such as rumors that PayPal was about to support cryptocurrency, likewise had only a brief impact.
With consolidation or “choppy” price behavior long underway, however, the mood among many analysts is decidedly more bullish this week.
“Target is the untapped liquidity at 9800 & 61.8%. Should be a nice trade to manage given the Point of control being so critical,” he wrote in his latest update.
61.8% refers to the Fibonacci retracement lines which have characterized long-term Bitcoin price performance in previous years. Recently, concerns appeared that BTC/USD could drop to a Fibonacci line in the $6,350 region.
“Looking X timeframe I’m now getting unconfirmed long signals on the Daily as well now we are coming out of the chop,” filbfilb added.