Bitcoin began 2017 at $1,000 — an impressive number that was good enough to start sending the word out to the mainstream media that this magical internet money that once took 10,000 BTC to buy two pizzas had now grown to a point where it should be taken seriously.
But 2017 was a watershed moment as the coin steadily rose to about $3,000 / $4,000 after six or seven months before closing out the year 20 times higher than it started it. This astronomical rise was unprecedented, baring perhaps major bubbles through history.
And perhaps that 2017 rise was the precursor to a bubble as the coin went from $20,000 on December 17 to $13,000 less than two weeks later, and then continued to fall and wallow in the doldrums of an 18-month bear market that helped many neigh-sayers push the bubble narrative.
However, things have come a long way in a few short years as Bitcoin has bounced back, fallen back, bounced back again and so on, and so on. But, having broken above $10,000 again, and shown very good signs of an ongoing rally, can it be presumed that we are in for another run to $20,000 — and higher — in these closing months of 2020?
Interest is back
The growth in 2017 was off the back of fresh interest and rife speculation, especially from people who did not know what Bitcoin was, but knew that they wanted it, and wanted the get rich quick notion it brought.
Now, Bitcoin has seen a fresh wave of interest again, but it is not quite the same — even though there are similar metrics.
Brock Connelly, the CEO of RoundBlock Capital, said:
“Has anyone noticed, daily active addresses (Bitcoin) is back above June 2019 levels, and approaching high of 1.29mm in December 2017. BTC market feels much different now.”
Another metric that suggests Bitcoin could replicate 2017, but not for the same reasons, is that According to IntoTheBlock, 93.76% of all Bitcoin addresses are now in profit. The researchers said:
“The Bitcoin network has a total of 702.11 million addresses, from which 30.99 million currently have a balance in BTC. At the current price of $11,758.8, 93.76% of the addresses with a balance are currently profiting from their BTC positions.”
This high level of profitability means there will be very little selling, and thus lower supply, and much more demand as investors look to accumulate before the big take off.
Resistance is high
Bitcoin breaking out of its range around the lower reaches of $9,000 a few weeks ago was key. The coin has since then smashed through the usually tough $10,000 barrier, and onto the $11,000 mark.
However, there has been a bit of slowing down here, especially taking into consideration the more than $1 billion worth of futures liquidations in one hour that sent the market plunging for a brief period of time.
Now it appears as if $12,000 could be a major resistance level, as was the case in 2017. But following the collapse of this resistance, Bitcoin started jumping by $1,000 increments in mere days on its way to $20,000.
If $12,000 is breached, and put in the rearview mirror, then Bitocin could well do a 2017 again, but for very different reasons.