Bitcoin (BTC) appears to be getting ready for a comeback that may lead to its repeat of the classic bull run years2013 and 2017. Analysts believe that the recent events that have happened in the market mean that a Q4 ‘blow-off top’ is now back on the menu as the price of bitcoin’s recovery clings to its 23% weekly gains.
On July 31, the flagship crypto recorded $42,400 local highs and the narratives around the market are changing back to a bullish Bitcoin “supercycle.” In recent weeks, BTC has been quite busy repairing the impact of the China mining rout that has been happening since mid-May. However, the past week’s price advances have been stronger than many expected prompting some commentators to say that the bulls might come out for a 2021 close.
Instead of suffering a major dip, Bitcoin price action has managed to hold onto its gains that currently stand at around 23%. What appeared impossible around seven days ago is now turning into flavor for July amidst an increasing segment of the analytical community.
“History doesn’t repeat itself but it often rhymes” #bitcoin
A repeat would be a Q4 blow off top. New ATH’s into 2022 seem more likely. Super cycle/last cycle will depend on what happens in 2023 IMO. https://t.co/07Ryn3pcTf
— ChartsBTC (@ChartsBtc) July 31, 2021
The founder and CEO of Vailshire Capital, Jeff Ross, said in Twitter comments on July 21:
“Following a troubling three months of news and price action, bitcoin went on to print five green monthly candles in a row and went up ~10x in the second half of 2013. I still contend that 2021 will behave in similar fashion.”
With this latest surge, in the meantime, bitcoin broke its 21-week exponential moving average (EMA) something that analyst Rekt Capital described mainly as a “time-tested bull market indicator.”
The Supply Shock Has Returned
While Ross said that such a forecast was “just a guess,” he now has a growing number of on-chain indicators to support him.
The hash rate is now back above 100 exahashes per second (EH/s) after plunging to 83 EH/s. On the other hand, difficulty saw its first positive readjustment since the May 2021 price crash on July 31.
Investor behaviour also mimics the change in sentiment dominating the current market. The major holders with little to no history of selling their BTC appear to be back in control at levels that have not been seen before and absent since BTC’s all-time high of $64,500 set in April.
The chief investment officer of Moskovski Capital, Lex Moskovski, summarized alongside an accompanying chart acquired from Glassnode:
“This is very bullish.”
That analysis showed holder conviction in terms of an increasing amount of the bitcoin supply becoming illiquid and exiting the market.
Another analyst, William Clemente, commented on the same data:
“Bitcoin ‘supply shock’ is now at levels that previously priced Bitcoin at $53K. Consolidation after 10 straight green days is very reasonable but still remains bullish over the coming weeks.”