The current Bitcoin market is similar to that of the beginning of 2016. The most important rally in its history occurred the following year.
The most important rally in the history of the main cryptocurrency occurred three years ago. Grayscale, Major analytics firm, recently published a report called “Valuing Bitcoin”, stating that currently, the Bitcoin market has similar characteristics to those of the period before the aforementioned rise in 2017. Price action and adoption by major investors, along with likely conditions of widespread fiat-money inflation, could push Bitcoin into a new bullish rally.
The Bitcoin market hit the bottom this year and, just 4 months later, came back to life. This leads to the conclusion that there is a power that is close to exploding the price at levels comparable to those of 2017.
Current Bitcoin Market is also Post-Halving
Another factor that contributes to understanding the qualities of the current Bitcoin market is that the crypto community is waiting for the respective post-halving explosion. It is necessary to remember that the deflationary nature of Bitcoin pushes for significant price increases after each halving.
In the first two Bitcoin halving events, which occurred in 2012 and 2016, the price of the cryptocurrency soared. This happened about a year after the reduction by half. Now, three months since the halving, a rally that balances the current Bitcoin market still seems to be lacking.
Halving events occur in cryptocurrencies like Bitcoin, in which it takes place every 4 years. This event consists of reducing by half the reward that the blockchain network pays to miners for each mined block.
Similarities to the 2016 Behavior
Grayscale believes that the current Bitcoin market conditions are extremely similar to those before the historic rally. The report explains that “it is a very similar structure to that of the beginning of 2016, before the start of the bullish rally the following year.”
On the other hand, Grayscale believes that actions by governments to try to keep the economy afloat in pandemic conditions can benefit Bitcoin. This is because investors seek to safeguard their income. In that sense, the main cryptocurrency works as a safe haven.
An excess of circulating money leads directly to inflation, one of the phenomena that investors fear the most. US Federal Reserve (FED) announcements to print “infinite money” increasingly push investors to adopt Bitcoin. This situation causes the current market of the main cryptocurrency to enter a boom stage again.
Institutional Investments
The massive adoption by investors like Wall Street is one of the most important drives that have led analysts to take Bitcoin into account in the face of a bullish rally.
In recent days, 90% of Bitcoin transactions in the United States have come from movements by stock market professional investors.
Legendary investor Paul Tudor Jones also expressed his optimism about the qualities of Bitcoin. This suggests that the current Bitcoin market could certainly be close to exploding upward, as it did in 2017.
By Alexander Salazar
