Overview of the cryptocurrency market from downtrend to uptrend
It’s another crazy day with Bitcoin, at which Bitcoin has broken through a series of resistances from strong to weak ones, and is now approaching $20k - the old peak in 2017-2018.
This period and what is happening remind me of Cycle Theory, as well as the uptrend period of 2016-2017, simply because markets can change anytime, but human psychology remains the same. This article will compare clearly the two periods: 2016-2017 and the current period, so that you can draw your own conclusions about what to do now.
One thing in common, which is also a harbinger of the entire market in 2016 as well as 2020, is that Bitcoin entered a relatively strong uptrend, and broke all important resistances.
If following the normal definition of critical resistance, the majority would think the current resistance is at $20,000. However, for the writer, right now, Bitcoin is likely to be at its true peak: $18.000.
Looking at the major milestones of the 2017 peak - Weekly Close, Bitcoin has never really closed at $20,000. Most of the trading volume, according to VPVR, happens around the $14.000-17.000 zone. And if everything goes well, the BTC weekly candle closes above it, and people who are in a short position will have a relatively painful time in the next round.
That’s to confirm $20,000 is actually just a psychological barrier for Bitcoin. And what is a psychological barrier, will often be easily broken.
And this is also the first similar point between the market in 2016 and in 2020. The price goes up in suspicion and fear of those who have lived too long in the downtrend and creates liquidity for buyers.
From this suspicion, we see the inevitable similarity between the two seasons: Google Trends and the children of Ponzi.
One interesting thing during the recent Bitcoin’s uptrend period is that despite the price going up, it has not yet attracted too much attention from the outside crowd. Looking at Google Trend, we see that our Google Trending index is at a relatively low level. Unlike the peak of 2017 ($20.000) or 2019 ($14.000), Bitcoin's Google Trending is currently still hovering around $15.000-$20.000. The keyword “how to buy Bitcoin” is also at a relatively low level. This keyword increased to its peak in mid-2017, when the price of Bitcoin climbed, and peaked when the price of Bitcoin peaked. Based on Google Trends, we can see that this is just the beginning, when the outside crowd has not come in because of FOMO, as well as the price going up in the suspicion of the majority.
In fact, even though the price is very high, the whole market is still very careful. We haven't seen too many news articles about Bitcoin (except for financial channels like VTV Money), nor have any stories about "Vegetable Lady" talking about Bitcoin. And while the crowd is still not FOMO, the price is still likely to go up as Bitcoin's chart and momentum are still relatively ideal.
And when the charts and momentum are beautiful, there are people who will not stand still like most traders today. They are people who are very good at seeing opportunities: multi-level teams.