Bitcoin Bull Market in 2019?

Triggers

In order for prices to rise kicking off another Bitcoin bull market, investor confidence has to rise. This begs the question, “have investors lost confidence in Bitcoin?” While this may be the case on some level, it makes more sense to believe that the crypto industry as a whole is where investor confidence has waned. Altcoin and ICO investors have certainly taken a beating during the past year.

Bitcoin opened with a market price of about $13,000 this year, having corrected from the all-time high of $19,000 just a short week earlier. As of this post, the price is on an upswing after setting new annual lows recently and the speculations are starting to surface. Is this the beginning of a new Bitcoin bull market? How high will the price go, and what does the new year have in store for crypto-investors? All questions we wish we could answer, but the fact is – nobody knows. So, let’s take a look at what might trigger a new bull run and the signs on which to keep a sharp eye.

Market Corrections

When unusual growth as seen in the last half of 2017 occur from investors buying in large part due to a fear of missing out (FOMO), a correction is always the result. A market correction started back in early January 2018, but a bear market is different from a market correction. A correction is when prices drop by 10% over a shorter time frame.  We saw seven corrections throughout the year, signaling a full-on bear market cycle. An average bear market hangs around for about 1.4 years and is considered “over” when the price moves upward 20% or more.

Many investors are hoping we’ve seen the last of it going into 2019, but quite a few may have called it quits by now. That is not surprising since more people invested in Bitcoin during December 2017 than in all the prior years of its existence. Clearly many investors were looking to “get rich quick” and had no idea what makes the underlying technology a worthwhile investment. When these investors bailed and sold their cryptocurrency, prices fell across the board.

Many altcoin and ICO investors have good reason to lose confidence, given most coins have lost money or exited the industry having been exposed as nothing but scams. Regulation scares and unfavorable press only contribute to the lack of investor confidence. At the same time, there are investors who shorted Bitcoin and profited on the crash tremendously. Those who bought without a clue keep selling, which serves to sustain the bear market. 

Bulls vs. Bears

A market bull believes that prices are going to go up, while a market bear is the opposite believing the price will go down. The longest bull run in the stock market happened between 1990 and 2000 which saw stock prices rise 417% during that period. The current bull run began in March 2009 and so far, the return has been 295%. The average return of bull markets since 1932 has been 165% – for the stock market.

That said, Bitcoin is notorious for the unexpected. Events we can only imagine might occur and easily trigger a bull run, especially since the all-time high was reached in a matter of days. FOMO is a powerful emotion and, while many who bought high only to lose money will be more cautious, those who stayed on the sidelines learned a valuable lesson and may not hesitate to jump in next go around.

Technical analysis of the cryptocurrency market only has a 10-year history of price to study when trying to forecast future price movement. Under the assumption that history repeats itself, many have made comparisons of the 2014 and 2018 Bitcoin bear markets, and indicate there is a similarity between the lower highs and lower lows inside the current falling wedge trendline. The question on everyone’s mind is whether the bottom has been reached. While no one really knows the answer to that question, it seems clear that Bitcoin – with the largest established network effect and more than 5 times larger than the next crypto coin in the lineup – is by far the better horse in the race.

Signs of Bitcoin Bull Market

So, we need another bull run so assets can regain their value and confidence can return – hopefully increasing more organically this time around with informed investors. While the bear market might not yet be over, it is worth paying attention to whatever signs appear that might signal a bull run. One such indicator might be Google traffic trends and statistics because when people start searching for knowledge, interest is growing. Of course, favorable news about the crypto-market can be a sign, but not a reliable one by itself. There are financial experts who see a global financial crisis looming, and feel that should it occur people will turn to Bitcoin.

The relationship between Bitcoin and altcoins more or less runs parallel most days. Bitcoin goes up, altcoins go up, bitcoin goes down, altcoins go down. If that changes and Bitcoin runs away by itself, it could be a sign of an imminent bull run. Of course, a crystal clear sign may be needed before another bull run is recognized and acted upon, given the losses incurred by many uninformed investors. The fact is investors that paid attention and made informed decisions have prospered greatly. These investors are those buying while there’s “blood in the streets” to accumulate as much Bitcoin as possible while the price is low.

If one considers history, the next Bitcoin bull market should be slow and erratic rather than a straight-up rocket to the moon. As cryptocurrency matures, infrastructure and adoption are increasing, so there’s nowhere to go but up – in our opinion. That being the case, it may be a good time to steadily and responsibly add to one’s holdings because early investors always come out ahead.

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