Will Bitcoin (BTC) Really Take 10 Years To Return To $20,000?

Will Bitcoin (BTC) Really Take 10 Years To Return To $20,000?

Bitcoin (BTC) is consolidating above $3,600 before its next big move but market sentiment is not very optimistic. In fact, the sentiment seems to have become even more bearish after BTC/USD capitulated in December. When the sentiment is overly bullish, we see people like John McAfee talk about a price of $1 million per Bitcoin (BTC) but when the sentiment is overly bearish; we see some of the most respected figures in the industry give statements that would appear completely ludicrous to someone analyzing the current situation from a neutral perspective. One of such statements was recently made by Charles Hoskinson, the founder of Cardano in an interview. He said that Bitcoin (BTC) might take ten years to return back to its previous all-time high.

Fortunately, we were also able to know how he came up with that statement. The reason he believes the market may take ten years to recover is because Amazon took ten years to return to its previous all-time high when the dot com bubble popped. Now, what Charles Hoskinson probably did not realize is that Bitcoin (BTC) is not a stock despite being a speculative asset at the moment. Furthermore, the Bitcoin (BTC) bubble has not popped for the first time! The price of Bitcoin (BTC) declined the same way during 2014. In fact, the price declined a lot more before it capitulated in 2014 as shown by the weekly chart for BTC/USD. It is pertinent to note that Charles Hoskinson denied 293,000 ETH in founder’s allocation fee which he later regretted when Ethereum (ETH) rose to an all-time high of $1,448.

Without doubting anyone’s intentions or aspirations, it is reasonable to expect that as human beings our thoughts are influenced by experiences of the past. I know a lot of people who missed the opportunity to buy BTC/USD at $300 after the 2014 bear market. So, when the price reached $600 they were reluctant to get into the market only to see the price top out close to $20,000 soon afterwards. If you want to succeed in trading or investing, you have to be in charge of your own emotions and pay close attention to others’ emotions. Readily accepting a statement just because it is coming from someone you deeply respect is not enough. You have to put the pieces together and formulate the big picture yourself.

The two charts from 2014 and 2018 share the same story and there is no need to complicate things. The chart from 2014 shows a bear trend that resulted in an 86% correction till the point of capitulation. The chart from 2018 shows a bear trend that resulted in an 84% correction till the point of capitulation. Both the times, the price remained above the 200 Week MA. In 2014, the price found a bottom 217 days after it capitulated and declined an additional 10% from the point of capitulation. Based on the numbers we have, we can expect BTC/USD to find a bottom in 189 days from its point of capitulation around the end of June. We can expect the price to fall less than 10% during that time which would result in an ultimate retest of the $3,000 level to mark the exact bottom. 

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