Hosting soaring prices over the past few weeks, bitcoin (BTC) has returned to the mainstream spotlight lately, at least on some level. The asset’s price recently broke past $19,000, putting it less than $1,000 away from its 2017 all-time high near $20,000. Although the asset has shown substantial upward price movement, the current bullish trend could be topping out, at least in the short term, according to derivatives trader and YouTuber Tone Vays, and Brian Krogsgard, a trader and podcaster.
“I’m expecting this bull run to end this month,” Vays told me in a message on November 24, 2020. “It’s possible that it has already just ended, but I’ve been saying for the last ten days or so, that this bull run should end in November or early December, but I’m not expecting a bear market.”
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
Bull runs represent periods of time yielding notable upward price action. Runs or trends can rely on context and vary based on different time horizons. Just because an asset may retrace in price for a period of time after an exuberant rally does not necessarily mean the asset has entered a predominantly bearish macro environment.
Market prices generally move in waves. In a macro bull market, upswings are often followed by smaller pullbacks, followed by additional larger upswings and smaller pullbacks. Higher highs and higher lows, as chartists say.
“I’m expecting either significant consolidation or most likely a pullback to the $14,000 to $15,000 area over the next few months,” Vays explained. “Then, it’ll take another month or two to get back to $20,000, and I am expecting the break of $20,000 around the end of Q1 of next year, so maybe March or April is when I’m expecting the break of the $20,000 area, and then we go up quickly.”
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Markets, however, move fast sometimes, requiring constant evaluation. “That’s my current outlook, but it can change tomorrow,” Vays noted of his position on bitcoin.
Bitcoin’s last all-time high occurred in December 2017, when the asset reached $19,892, based on Coinbase exchange data on TradingView.com. The coin revisited the $19,000 level three years later, reaching $19,468 on November 24, 2020 after more than seven weeks of strong upward price movement, shown via the past seven consecutive green weekly price candles on bitcoin’s chart. Mainstream media outlets, such as CNBC, Reuters and Fox FOXA -0.5% have also jumped on board covering bitcoin’s price recently, giving the blockchain-based asset attention.
Overall in 2020, bitcoin has seen significant highs and lows. Between February and March, the asset dropped from $10,500 to $3,860 around Covid-19 news. By May, bitcoin found itself back up past $10,000 once again. The months following yielded relatively sideways price action, leading up to a July breakout.
“In my mind, the bitcoin bull run began in July of 2020 with the break of consolidation around $9,200 and confirmed it by holding the 20-week moving average at $10,400 in September,” Krogsgard told me in a message on November 24, 2020.
“Many market participants are willing to wait for new highs and price exploration to participate. We have now run very hot, and are due for a substantial mean reversion — which would be a big buy on dip opportunity; the macro environment favors bitcoin greatly.”
For bitcoin, all-time high levels past the $20,000 range stand as foreign territory, lacking historical price chart levels from which to base evaluation.
“I expect we can see at least one year of price exploration in this cycle, and I want to maintain significant bitcoin exposure at least until $50,000,” Krogsgard noted.
Although a number of mainstream financial players have bought into bitcoin this year, such as business intelligence outfit MicroStrategy MSTR +0.4% and its $425 million BTC purchase, some participants still remain opposed to the coin. Peter Schiff has repetitively expressed gold as superior to bitcoin. Warren Buffett has also commented negatively on bitcoin in previous years.
Note: This article has been updated, clarifying that weekly candles refer to bitcoin’s price chart.
Disclaimer: I actively trade cryptocurrencies, as well as hold a small amount of BTC, ETH, LTC, ZEC, BCH and LINK.