Bitcoin is up 17%, but history suggests there could be losses

There were a total of 14 days in which the price of Bitcoin rose by more than $ 1,000 in just 24 hours. However, a look at history shows that such movements may not be as encouraging as one might think.

BTC at races: The historical price uses Bitcoin’s halving month

Bitcoin is no stranger to volatility. In its 11-year history, the leading cryptocurrency has seen many price fluctuations both up and down, making all movements except the most extreme on Wall Street appear tame.

Wednesday was one of those days. At around 8:00 GMT, BTC was trading near USD 7,900. Just 24 hours later, he set a local ceiling of over $ 9,400. As BeInCrypto reported, volatility typically coincided with the decline in services from a major cryptocurrency exchange, much to the detriment of traders.

In the month of Bitcoin’s third halving, these price movements seem bullish at first glance. However, history suggests that Bitcoin’s most violent ups and downs are more likely to precede losses.

What goes up …

How Timothy Peterson, CFA of Cane Island Alternative Advisors, found via Twitter, there were only 13 other cases where the price of BTC rose more than $ 1,000 in a single 24-hour session. On average, there were significant losses in the weeks and months that followed.

A chart published alongside Peterson’s tweet shows the average returns for a week, a month, and three months after the four-digit increase in Bitcoin in a single day. The seven days, 30 days and 90 days after one of these windfall days show losses of 5, 21 and 38 percent.

The month that Bitcoin’s biggest historic price hike took place in December 2017 saw spectacular gains of over $ 1,000 for several days. The peak near $ 20,000 would trigger a downtrend year-round that would bring some of the biggest losses in a single day. Although the price development in a week did not necessarily show losses on some of these earlier occasions, it was the longer terms.

In early 2018 there were also a few days with + $ 1,000 for Bitcoin. However, these short-term increases marked the significant downtrend that led Bitcoin to the bear market low of around $ 3,200. Understandably, the benefits for the week, the month and three months afterwards were very lossy.

Another example that could indicate price losses is the tracking of yesterday’s move in October last year. As BeInCrypto reported at the time, Chinese Prime Minister Xi Jinping started the bullish movement with the statement that the world’s leading power is interested in the introduction of blockchain technology.

However, in the days and weeks that followed, the price would lose most of its earnings and hit its annual low of around $ 6,600, exactly two years after Bitcoin hit its all-time high in December.

Although these large price movements have mostly preceded the losses, some of Peterson’s respondents don’t think the $ 1,000 day is the right way to rank Bitcoin’s biggest gains. After all, a $ 1,000 move between $ 6,000 and $ 7,000 is much more significant than a move between $ 16,000 and $ 17,000.

Many observers argued that percentage gains are the only real way to identify Bitcoin’s biggest price moves. The trend described by Peterson is less pronounced using this alternative data.

---

---

Do you use telegram? Join the Telegram trading community to get exclusive buy and sell signals for cryptocurrencies, educational content, discussions and project analysis!

Join the Cryptocurrency group on Facebook to comment on the latest news, share the best blockchain projects and trading signals, and win the market