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- Bitcoin hit $69,000 on Tuesday and then dropped $10,000
- Price volatility under all-time highs is expected
- Can history teach us anything about what to expect?
Bitcoin tapped its November 2021 high of $69,000 on Tuesday before a violent $10,000 drop. Its quickfire recovery to $68,000 has shown that it is currently an unpredictable beast, and as a result, everyone is looking for clues as to how it will behave around this key psychological level. We turn to history to see if we can learn anything from the last time this happened and apply it to the current position.
Three Weeks in 2020
Looking back at the last time Bitcoin broke its prior high following a bear market, we can see that it was far from an easy ride:
As we can see, a rejection at $19,500 on November 25 saw it wick down to $16,000 before it reversed and launched another assault the week after, only to be knocked back at the prior high of $19,800. Bitcoin then spent another two weeks consolidating before finally bursting through on December 16, making it a three-week process to get through that psychological barrier.
A similar situation seems to be playing out this time around:
We can already see a rejection from the $69,000 high resulted in a sharp wick and then a quick recovery. If history plays out again then we can expect some consolidation underneath this key level once again, although the speed at which Bitcoin is moving thanks to the ETF inflows suggests that maybe this process will take days rather than weeks.
However long it takes Bitcoin to breach this all-time high, assuming it eventually does, we can expect some green and some red candles before it finally makes tracks. And don’t forget what Bitcoin did when it finally broke through in 2020…
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