4 Key Similarities to Previous Bull Market Corrections

While Bakkt clients will be able to deposit their funds into the Bakkt Warehouse next week on Sept. 6, Bitcoin price is trending downwards after falling below $10,000 in the run-up to the event. 

So is this already priced in or the market cycles are just repeating themselves? Let’s take a look at some key similarities to previous bull market cycles. 

Similarities I & II: 100-week MA & 21-week EMA providing support

BTC/USD Weekly chart. Source: Tradingview

A common discussion lately on Crypto Twitter suggests that there’s a confluence between the so-called Bitcoin (BTC) price “bubble” top of 2017 and the last top at the end of July at $13,935. In a sense, parabolic movements tend to repeat the same stages over and over again. However, there are some substantial differences between them. 

The top of 2017 came at the end of a market cycle, which essentially started with the confirmation of the 100-week Moving Average (MA) and 21-week Exponential Moving Average (EMA) during January 2016. 

However, the top of July 2019 was essentially the first peak above the 100-week MA and did not face the euphoria comparable to the period in December 2017. So, are they comparable? 

Basically, during the whole bull market of 2016–2017 there were several parabolic movements ending in a retracement. 

The start of this was the period during Q4 2015 and the beginning of January 2016 through which Bitcoin price ended the bear market with a parabolic move and found support at the 100-week MA and 21-week EMA. 

After this confirmation the market has seen several corrections of 30-40%, which are quite healthy for an upwards trending market. 

With that in mind, it makes more sense to compare the previous parabolic movement towards the first parabolic movement coming out of the bear market in 2015, as that was the kickstart of a new cycle. 

Relying on the chart, this could mean that Bitcoin price could face another test of the 100-week MA or the 21-week EMA to confirm the bullish…

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