The month of January is usually bearish for bitcoin price but this one has bucked that trend. It has been the best start to the year since 2012 but analysts are eyeing even greater gains in 2021.
A dump down to $8,500 a few hours ago was responded to rapidly as the following candle on the hourly chart was larger and green.
Bitcoin price quickly moved back into its short term range bound channel pushing to the top of it at $8,700. A sustained move higher is looking likely as there is least resistance to the upside and $9k could be back in play soon.
No January Blues For Bitcoin
Monthly returns for bitcoin price in January for the past five years have been negative. 2015 was the worst January with a loss of 27% followed by 2018 when the asset slumped 21.5%. Last year bitcoin price dropped 10% in the first month of the year and only September has been worse on average over the past nine years.
So far the case has been different for 2020 with BTC gaining 21% to current levels in just three weeks. The month is not over yet but a dump back to $7,150 looks pretty slim at the moment.
Bitcoin blogger Sylvain Saurel has conducted an in-depth analysis into BTC movements at the beginning of the year. The study has been done to highlight the cyclical side of the evolution of bitcoin price with each halving as a starting point.
The research goes back to 2012 and starts the comparison there. In the same twenty days in that year, BTC price increased by a similar amount, around 23% to reach $6.50. Who wouldn’t have wanted to load up then!
By the end of the year, prices had increased by 157% to end at $13.50. The following year, after the halving, resulted in an epic bitcoin price pump of 5800% to end 2013 over $750. The next year was one of correction with a bear market taking prices back down again while 2015 showed signs of recovery at the end.
2016 was the year of the second halving and while January was flat, the asset gained 123% by the end of the year. 2017, the year following the halving, again saw a monumental bull run with bitcoin prices rising 1450%.
2018 as we all know was a mirror of 2014 with a huge correction and 2019 has shown signs of recovery with BTC gaining 85% over the year.
Geopolitical tensions have no doubt played a role in the performance of bitcoin this month as the safe haven narrative was strengthened during the crisis. However, the study concludes;
“The evolution of bitcoin price at the beginning of a year has no real impact on the overall annual trend.”
Price Peak in 2021
The conclusion leads on to the finding that the evolution of bitcoin price is cyclical with the halving as the starting point for the new cycle.
“The year following a bitcoin halving is when the bull market for bitcoin is at its strongest with respective price increases of +5,800% in 2013 and +1,450% in 2017.”
With that in mind, the research suggests that 2021 will be a stronger year for BTC prices than 2020. In terms of gains, looking at previous rises 500% would not be out of the question.
At current prices, this would put bitcoin at around $17k by the end of 2020 and as high as $100k in 2021 when the big rally really takes off.
Will bitcoin surge this year or next? Add your thoughts below.
Image via Shutterstock
The Rundown
