We have just entered a critical year for the global economy and crypto in general. The recent unfoldings in the Middle East are already influencing some of the global economies, while the upcoming 2020 Bitcoin Halving is slowly getting into everyone’s head. Crypto traders and investors should take note.
But before we move onto a more distant perspective, let us dwell on a pattern that has happened in crypto investment a few times so far, always in January.
One of the most commonly spouted tenets of cryptocurrency trading is “past performance is never an indicator of future success.” However, when the same pattern occurs three years in a row at almost the same time, it can be easy to question the validity of this statement.
In this case, we are talking about the fact that Bitcoin (BTC) has witnessed a significant pump for the past three years at the beginning of January—gaining between 10% and 24% in the first week of the new year.
Take a look
- 2017: 21.9% pump first week of the year.
- 2018: 24.3% pump first week of the year.
- 2019: 11.8% pump first week of the year.
- 2020: 21% pump first week of the year.
- 2015 (14 Jan) Dump from 320$ to 150$, which is 50%
- 2016 (16 Jan) Dump from $460$ to $360$, which is 20%
- 2017 (11 Jan) Dump from $1120 to $770, which is 35%
- 2018 (16 Jan) Dump from 17500$ to $9700, which is 45%
- 2019 (10 Jan) Dump from 4000$ to $3500, which is 15%
- 2020 (10 Jan) Dump from 8400$ to 7750, which is almost 9% so far.
However, for the past five years, Bitcoin has dumped by at least 15% beginning from mid-January, whereas that has been as high as 50% in the past. Should this happen for the sixth time in a row, Bitcoin could potentially fall again.. With that said, those traders with a keen eye might be able to turn a significant profit during this time by shorting the market.
Although the reasons behind this cycle remain unclear, some have speculated that the frequent January sell-off occurs as a side effect of the Chinese New Year. During this time, cash-strapped investors could look to sell their holdings for participating in Hong Bao—the tradition of giving away red envelopes filled with cash to friends and family.
From a TA point of view, a return to the 8000 levels seemed almost inevitable, and the 7800 and 76000 are also likely. As you know, technical analysis is not an exact science, and it is not impossible to witness a new impulsive bullish candle against all the odds.
That was the TA, but what about the bigger picture?
The FED in the US has re-started quantitative easing, and all asset prices are going up again. There is a lot of liquidity out there, and they are adding more each month. Under such circumstances, asset prices will not go down, or at least not in a significant way, before going up again. ECB has, in theory, stopped QE last September, but in practice, it remains to be seen. It looked as if they had been up to something bigger.
Now, last week’s US killing of the Iranian general was an essential fundamental piece of news, which was followed by an Iranian “promise” to revenge. They have struck twice so far, hitting the Iraqi-based US military bases.
In times of political turmoil, assets like oil, gold, silver, platinum, and Bitcoin usually go up. People look for a haven for their funds, and it may be the same this time as well.
We are above the line that kept us under for six months. That has some game-changer potential. The bottom is 99% in, so from now on, it is about front running towards halvening.
In our opinion, that US – Iran tension may be the spark that can instigate another bull run towards 2020 Bitcoin Halving in May. The crypto market is susceptible to news and manipulation, but it is what we are suspecting. Bitcoin price might reach its new ATH in late 2020 once again.
What should you do then?
It would be best if you always looked for professional trading and investment help or always do your research. For that, check our Confidential Reports to get highly professional and accurate insight into crypto.
Last but not least, if you are a High Net Individual or you manage a fund, contact 4C-Trading for some tailored-up investment solutions and get a unique and personalised approach to your assets portfolio.
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