As said by Thomas Lee, a co-founder at Fundstrat Global, bitcoin has historically tended to record most of its gains in a short time frame, typically in a 10-day window, unlike traditional assets and asset classes.
2/ Reminder that BTC generally generates all of its performance within 10D of any year.
–ex the top 10 days, BTC is down 25% annually since 2013 pic.twitter.com/zoEocEEZvu
— Thomas Lee (@fundstrat) April 2, 2019
According to cryptocurrency researcher Alex Saunders, the last time the bitcoin price closed above $8,300, it took 13 days to achieve a new all-time high at $20,000.
Whilst it remains unclear whether a similar short-term performance would be demonstrated by bitcoin this time around due to the noticeable difference in catalysts that are triggering the upside movement of the asset, it is worth considering the trend shown by the asset in the previous bull market.
Will bitcoin experience a similar bull run as 2017?
It is highly unlikely for bitcoin to initiate a sudden recovery to $20,000 in the near-term as it approaches $8,300. In 2017, the $8,300 mark represented a level which was secured following an impressive $7,000 gain in 12 months.
The fourth quarter of 2017 ended with a 219 percent because of the rally of bitcoin from $8,000 to $20,000, but in previous quarters, the dominant cryptocurrency consistently recorded large gains against the U.S. dollar.
current quarter ranks as the 2nd highest quarterly gain since 2014 and the 7th highest quarterly gain all-time pic.twitter.com/bNTohKJREw
— Josh Olszewicz (@CarpeNoctom) May 19, 2019
Hence, although it is not reasonable to expect bitcoin to suddenly run up from $8,000 to $20,000 in a short time frame in the near-term, it is possible for the asset to experience an abrupt run up by the year’s end if it consistently performs strongly throughout the year.
“The last time bitcoin had a daily close above $8300 whilst in a uptrend was Nov 25 2017. It then took 13 days (11 up. 2 sideways. 0 down.) to reach $20k,” said Saunders.
Previously, speaking to CNBC, former Coinbase CTO Balaji Srinivasan stated that the bitcoin market tends to move by cycles. Bitcoin tends to go through a pattern of bubble-burst-build-rally, and in the past 10 years, the pattern has occurred four times.
Yeah, it’s the Carlota Perez/Gartner Hype Cycle thing all over again. Virtually every major technology has an initial spike of interest, then a dip, and then a long-term rise to success. The dot-com bubble is the canonical example, but there are many more. Bitcoin alone has gone through at least four of these cycles.
The pattern materializes because following every bear market, companies, developers, and market participants work to strengthen the infrastructure supporting the asset class.
In 2019, infrastructure development has been targeted at institutions with the involvement of major financial institutions such as Fidelity and TD Ameritrade.
So far into the year, institutional investors have responded positively to the significant progress made by companies in improving the quality of custodial services and regulated investment vehicles that accredited investors can use to commit to the market.
Bitcoin has already recorded its second-best quarter since 2014 and is closely resembling the trend seen in 2017.
If the 2017 bull run was primarily triggered by retail investors, industry executives expect the 2019 rally to be triggered by institutional investors.
Should investors be concerned about volatility?
In the past several days, the bitcoin price has wildly moved between $7,500 to $8,000, demonstrating extreme volatility in short time frames.
A cryptocurrency trader suggested that the volatility of bitcoin could be beneficial for altcoins and tokens with small market capitalizations, leading the rest of the cryptocurrency market to engage in a strong bull run.
“Everything going as planned. Altcoins starting to run – IEO’s pumping away, LINK + a few others just getting started. More altcoins will start to run as we scale in. June they will fly. You will see that bull market pumps are quite different than bear market pumps,” the trader said.