Renowned crypto analyst, Tony “The Bull” Severino, has issued a warning to the cryptocurrency community about the potential pitfalls of drawing parallels between Bitcoin’s current market cycle and its 2017 bull run. He suggests that the current market circumstances are distinctly different from what many investors are expecting.
As Bitcoin’s price oscillates between $81,000 and $84,500, Severino’s alert surfaces amid signs that the buying trend might be reaching its peak. The crux of Severino’s viewpoint lies in the stochastic oscillator, a momentum indicator frequently used by technical analysts to determine whether a cryptocurrency is overbought or oversold in relation to its recent price range.
When applied to Bitcoin on a monthly candlestick timeline, the oscillator provides an extended perspective of long-term momentum trends dating back to 2013. This timeline encompasses all significant bull and bear cycles and exhibits numerous recurring patterns. Severino’s perspective is a response to those market participants who correlate the 1-month Bitcoin stochastic oscillator’s movement to its past levels in 2017, in anticipation of a similar pattern in the current market.
However, he argues that the current level aligns more with the 2018 bear market’s inception rather than the 2017 bull run’s momentum peak. During the 2018 bear market, Bitcoin experienced a dramatic 49% drop within a single month. Thus, any similarities to the 2017 bull market might be deceptive from a bullish technical standpoint, as it suggests that Bitcoin may be on the verge of entering a similar bearish phase.
Recent price action shows Bitcoin struggling to maintain strong inflows and buying momentum. On-chain data suggests that many short-term holders have paused their buying activity amidst extended consolidation, which doesn’t augur well for bullish prospects. Despite these challenges, Bitcoin has managed to stay above the $80,000 mark during the recent market instability. Furthermore, it has managed to rebound and reclaim ground above $83,000, showing early signs of decoupling from traditional financial indices.
As of this writing, Bitcoin is trading at $83,693.
