Is the Bitcoin bull run only in the ‘disbelief’ market cycle phase?
Bitcoin (BTC) topping out at $64,500 would mean that this bull market is unlike any other in history, one commentator argues.
In a tweet on Tuesday, Alex Saunders, founder and CEO of Nuggets News, used a classic Wall Street paradigm to suggest that BTC’s price is far from its macro top.
No Bitcoin bull run ends in “disbelief”
Bitcoin has so far failed to crack resistance even at $40,000, languishing 50% below its recent all-time highs.
As fear lingers as the driving force behind market sentiment, many are concerned that bullish momentum cannot compete with recent bearish price events.
Chief among them is the forced miner migration out of China. With months set to pass before the hash rate recovers, even the most tried-and-tested Bitcoin price models are being stretched to their limits.
For Saunders, however, China’s move to “go for the kill” when it comes to Bitcoin’s health has already failed to produce its intended result.
“In 9 years I’ve never seen a bull market end in disbelief. Consensus is sideways & 1 more leg down,” he summarized.
Saunders referred to the classic market cycle paradigm in which “disbelief” precedes a dramatic price run-up in a given market. After a comedown from a macro high, “disbelief” likewise signals a reawakening after a protracted period of losses.
His comments came as fresh comments from the People’s Bank of China reiterated previous negative sentiment on cryptocurrency, warning banks not to allow transactions associated with the industry.
Unlike last time, however, the news had barely any impact on Bitcoin price action.
“Wall St. Cheat Sheet” graphic. Source: ritholtz.com
The hash rate bottom may already be in
He is far from alone in his belief that Bitcoin has not seen its highs in this halving cycle. Supporting him is stock-to-flow model creator PlanB, who is eyeing a minimum BTC/USD price of $135,000 by the end of 2021.
As Cointelegraph reported earlier this week, signs that the worst of China’s mining crackdown is already over are already visible in Bitcoin network fundamentals.
The hash rate has bounced off its recent lows, while difficulty is busy accounting for the biggest reshuffling in mining power that Bitcoin has ever seen.
This may nonetheless mean that difficulty sees an even bigger drop at the next readjustment in just under two weeks’ time. Thereafter, the added miner presence resulting from increased profitability should allow the network to complete its automated balancing act.
Bitcoin 7-day average hash rate estimate chart. Source: Blockchain.com
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