This is a pattern I like to call the “Daddy actually came home after over 2 years of searching for cigarettes to at a liquor store” Price Pattern.
It’s when Bitcoin recovers back to a price it hasn’t seen in on average over 2 years since dropping from a previous all time high. Not the all time high price itself, but a price on the way down during the drop from an all time high. It’s a price many lose hope in ever returning after the drop, and believe will never happen again because of how long it’s been gone. The price itself feels like a father who left for “cigarettes” long ago, who you never expect to return.
And just like in that situation, the kids tell themselves that if their dad ever did return, they’d they’d be so happy and excited to see him that they would do everything so he never leaves again.
And that’s exactly what happens to Bitcoin’s market when this pattern emerges. The market gets so excited to see it return, that it sends itself into a supply shock, and demand explosion frenzy that makes Bitcoin run up in price at record levels and rates for as long as a year+.
An endless loop that always repeats itself thanks to the halving and Bitcoin’s finite 21 million total Bitcoin supply network causing an endless feedback loop of price and stability increase attracting new buyers, traders, and hodlers growing demand for this infinitely finite asset. A perfect balance.
Back in November 2016, that price was $700, and it had not been seen in over 2 years since last appeared way back in February 2014, dropping from a $1,300 all time high price reached 2 months prior in December 2013.
Every time this happens, the market gets excited and it triggers up to over a year long bull run to discover a new all time high price. This will happen again, and I suspect it will happen throughout 2021, possibly spilling into the start of 2022 before correcting, and restarting the cycle.
It reminded me of this pattern I had completely forgotten about since it last happened in 2016, and the $700 price return in November 2016 after a 2 year hiatus lead into the year long 2017 run up to $20k