Bitcoin Could Peak at $45K in May, Analyst Says

Facebook iconLinkedin iconTwitter iconFeatured SpeakerAlex ThornHead of Firmwide ResearchGalaxyHear Alex Thorn share his take on "Bitcoin and Inflation: It’s Complicated” at Consensus 2023.Secure Your SeatFacebook iconLinkedin iconTwitter iconFeatured SpeakerAlex ThornHead of Firmwide ResearchGalaxyHear Alex Thorn share his take on "Bitcoin and Inflation: It’s Complicated” at Consensus 2023.Secure Your Seat

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 soared 80% this year, beating traditional risky assets, including the tech-heavy Nasdaq index, by a wide margin. The rally comes after a 12-month decline, when prices fell 76% and bottomed out last November.

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 recovery from bear cycle bottom in 2022 vs recovery from the 2018 bottom (K33 Research)

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 once 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, using the acronym for all-time high. “The early 2023 rally has all the hallmarks of a hated rally.”

Bitcoin changed hands at $29,850 at press time, a 1.5% decline in the past 24 hours, according to CoinDesk data.

Edited by Sheldon Reback.

DISCLOSURE

Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.

Trending1MarketsFirst Mover Asia: Bitcoin Settles In Below $29.5K as Appeal of Riskier Assets LessensApr 18, 20232MarketsBitcoin Surge Parallels Price Movement in 2019: AnalystApr 18, 20233TechnologyMicroStrategy’s Saylor Integrates Bitcoin Lightning Address Into Corporate EmailApr 18, 20234PolicyRyuk Ransomware Gang’s Crypto Broker Gets Light Sentence After a Guilty PleaApr 17, 2023

Source coindesk.com