As bitcoin nears its all-time high, industry experts and investors are watching for signs of its next big move. Alex Thorn, head of research at Galaxy, recently shared his perspective on bitcoin's price trajectory and the factors influencing its potential breakout. in a detailed mail On X (formerly Twitter), Thorn provided insights based on historical data and current market dynamics.
“We will scale the wall of worry,” Thorn proclaimed, setting the tone for his analysis. bitcoin's recent price action saw it hit $69,324 on Coinbase on Tuesday, marking its first all-time high since November 10, 2021. This milestone came after an 846-day period of anticipation and speculation, only for the price fell 14.3% to an intraday low of $59,224. This volatility, exacerbated by $400 million in long liquidations in one hour, underscores the unpredictable nature of cryptocurrency.
Despite the pullback, bitcoin recovered and returned to trading at $67,000. Thorn commented: “Volatility is back and is likely to remain as we scale the wall of worry.” He compared the current situation to 2020, when bitcoin first approached its all-time high of around $20,000 since December 2017.
btc faced initial resistance, experiencing a 12.33% drop after hitting the barrier twice, before finally advancing. This pattern highlights the psychological and technical challenges of previous all-time highs, a natural resistance point for any asset class. This time a similar (second) move may be necessary to remove all sellers from the market.
Describing the “Wall of Worry,” Thorn explained: “By my calculations, from January 1, 2017 to the all-time high of ~$20,000 on December 17, 2017, bitcoin experienced 13 drops of over 12% (12 were 15). 13 reductions of 10% or more (7 of them were 15% or more).”
Notably, bitcoin has already had two pullbacks of more than 15% since spot ETFs launched on January 11. This week was the second, the first major drawdown was directly after the ETF launch, and the price fell by about 20%.
Why bitcoin is just getting started
In his analysis, Thorn also addressed the role of “old currencies” or long-standing bitcoin in shaping market movements. “Some old coins were revived and probably sold, which possibly helped create the intraday high,” he explained, pointing to blockchain data indicating the movement of coins mined as early as 2010. This change from old to new hands is characteristic of bullish markets. in bitcoin, facilitating its wider distribution and acceptance.
Highlighting the importance of market sentiment and investment flows, Thorn noted: “And Tuesday was the largest bitcoin ETF inflow day and the second largest net inflow day (+$648 million) since DAY 1.” This impressive influx of capital into bitcoin ETFs underscores the growing interest and confidence in the cryptocurrency, even amid volatility.
Thorn remains optimistic about bitcoin's future, suggesting that the current price dynamics are typical of cryptocurrency bull markets, known for their non-linear progression and numerous corrections. He underlined the resilience and potential for growth despite the headwinds, stating that “nothing in yesterday's price development makes me think we're not going to go higher.”
In conclusion, Thorn's analysis provides a nuanced view of bitcoin's path to surpassing its all-time high. By comparing current events with past market behaviors, Thorn offers a compelling argument for bitcoin's continued rise, but after a possible consolidation phase with several touches of the all-time high before a definitive breakout. “Buckle up, folks. We are still getting started,” he advises.
At the time of this publication, btc stood at $66,821.
Featured image created with DALL·E, chart from TradingView.com
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