Bitcoin Continues to Outpace 2021 Bull Market
Bitcoin has been experiencing a bullish trend for over 640 days, provided we consider the current market conditions. Approximately a couple of hundred days ago in January, the performance of bitcoin’s bull market had been aligning closely with the previous two cycles, yielding returns of just under 4.5 times. However, during the 2015 to 2018 cycle, bitcoin’s trajectory was rapidly intensifying. Between January and July 2017, the value of bitcoin surged from $800 to over $2,800, eventually reaching nearly $20,000 by the end of 2017, marking an all-time high that remained unbroken for three years.
Presently, bitcoin’s performance more closely mirrors the most recent cycle, spanning from 2018 to 2022, as indicated by the brown line in the chart above. It has achieved a 278% return to date compared to the previous 244%. Not all cryptocurrencies have experienced the same bullish trend as bitcoin. For instance, Ether has not been this distant from surpassing bitcoin in almost three and a half years.
The orange and pink shaded areas in the background of the chart below represent the market cap of bitcoin and Ether, respectively. These areas are stacked, and a flippening would occur when the smaller area occupies more than half of the combined space. The ETH/BTC ratio, which measures the cost of Ether in bitcoin, has decreased by nearly half since the end of 2021. The blue line on the chart illustrates this decline, steadily receding since the peak of the 2021 bull market.
On the other hand, Solana is currently the closest it has ever been to surpassing Ether. A year ago, Solana’s market cap was only 4% of Ether’s, standing at $9.3 billion compared to $217.2 billion. Presently, it has reached 22%, valued at $66 billion versus $307.6 billion.
The duration of the ongoing bull market remains uncertain. Comparing it to previous cycles yields varying results across different models. The simplest approach initiates bull markets when bitcoin hits a low point and concludes once a downward trend is fully confirmed. According to this method, our current bull market commenced on Nov. 9, 2022, when bitcoin dropped below $15,670 after FTX suspended withdrawals — 642 days ago. The preceding three bull markets lasted between 1,047 days (2015 to 2018) and 1,278 days (2018 to 2022). If bitcoin is indeed following these four-year cycles (which is not guaranteed), we are now past the halfway point of the current period.
Should the bull market have already concluded, it would be the shortest in bitcoin’s history, excluding the initial price discovery in the two years following the genesis block. While past performance does not predict future outcomes, the ongoing bullish trend suggests that bitcoin’s price action is still cyclical, potentially indicating further upward movement to align with historical patterns. Based on the duration of previous markets, bitcoin could remain bullish until mid-next year, aligning with certain analyst forecasts.
