- Bitcoin’s historical data reveals potential support levels and the duration of the ongoing bull run.
- On-chain analysis platform CryptoQuant sheds light on Bitcoin’s support levels using profitability ratio data.
- When the profitability ratio neared the 1,500 DMA, significant corrections of approximately -33.4%, -39.6%, and -40% respectively were observed.
Discover how Bitcoin’s historical data forecasts the continuation of the current bull market and the key support levels to watch for potential trends.
Bitcoin’s Historical Trends and Support Levels
The detailed analysis of Bitcoin’s historical data indicates various support levels that traders and investors should monitor. CryptoQuant’s recent report emphasizes the profitability ratio, highlighting how approaching the 1,500 DMA has historically resulted in significant market corrections. For instance, three major corrections during past market cycles were approximately -33.4%, -39.6%, and -40% respectively. Furthermore, just before the peak of the 2021 bull market, a sharp decline of -31% was documented.
Comparative Analysis of Bull Markets
Analyzing the duration and intensity of previous bull markets, such as the one in 2017 lasting 580 days and the 280-day rally in 2021, helps put the current cycle in perspective. In the ongoing cycle, Bitcoin has been on a rise for about 200 days. The patterns suggest that based on past trends, the current bullish phase might continue for at least another two months, assuming no drastic change in market sentiments.
Potential Short-Term Corrections
Despite the overall bullish outlook, the recent corrections in May—a decline of –23.4% and a subsequent two-week 16% drop—pose some cautionary notes. These corrections tested the +0.4 Standard Deviation (SD) level, a critical pivot that has historically signified potential reversals. If the profitability ratio were to dip below +0.4 SD and approach the 1,500 DMA, it might herald the onset of a bearish trend, suggesting that investors should remain vigilant.
Conclusion
The current analysis indicates that Bitcoin is likely to remain in a bullish phase for at least a couple more months. However, constant monitoring of key metrics such as the profitability ratio and significant moving averages is crucial. Investors should watch for any dips below the +0.4 SD level, as approaching the 1,500 DMA could signal the start of a bear market. Continuing to stay informed and adapt to changing market conditions will be pivotal for navigating Bitcoin’s volatile landscape.
