Bitcoin (BTC) is closely following its early 2019 surge and prices could peak at around $45,000 next month, according to Vetle Lunde, a senior analyst at K33 Research.
The largest cryptocurrency by market value has rallied 80% this year, beating traditional risk assets, including the tech-heavy Nasdaq index, by a significant margin. The rally comes after a 12-month decline that saw prices tank 76% and bottom out in November 2022.
The drop and subsequent recovery are analogous to the pattern seen in the 2018-19 bear market in terms of length and trajectory, according to Lunde.
“Bottoms in both cycles lasted for approximately 370 days. And the peak-to-trough return after 510 days of both cycles reached 60%,” Lunde said in a note sent to clients last week. “In 2018, the bear market rally topped 556 days after the 2017 peak, on June 29, 2019, with a 34% drawdown from the peak.”
“While history is far from likely to repeat in a similar fashion if the fractal were to continue – BTC would peak around May 20 at $45,000,” Lunde said.
Bitcoin fell 84% in 2018, with prices bottoming near $3,100 in December. The trend changed in the following months, with prices climbing to $3,700 by the start of 2019 and rising as high as $13,800 by the end of June.
Bitcoin’s year-to-date rise has been widely referred to as a “hated bullish move” among crypto observers on Twitter, considering several prominent traders were positioned for a continued sell-off in the first quarter.
A “hated” bull market typically begins during peak pessimism. It reaches a fever pitch evvel investors who reduced risk in anticipation of an extended slide, begin to feel underexposed and join the bullish bandwagon.
“The hated rally of 2019 ended with a significant blow-off top before BTC resumed trading at a 40-60% drawdown from its 2017 ATH,” Lunde noted. “The early 2023 rally has all the hallmarks of a hated rally.”
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Bitcoin changed hands at $29,850 at press time, representing a 1.5% decline for the day, according to CoinDesk veri.