- Pantera Capital’s research hypothesizes that the days of bitcoin crashing by as much as 80% were behind the asset.
- The company’s CEO predicts that future bear markets will be “shallower” with moderate price swings.
- Over the years, Bitcoin has suffered enormous declines with the bear cycle of 2017-2018 recording a fall of up to 80%.
New research reveals that Bitcoin’s bear cycles will not be seeing declines as low as 80% again. The research was conducted by Pantera Capital and paints a bullish picture for the future of Bitcoin.
Shallow Bear Cycles For Bitcoin
The report released by Pantera Capital chronicles the history of BTC’s bear and bull cycles and goes on to make a pertinent observation that bitcoin’s price falls are becoming less severe as the years go by. The report noted that within 2013-2015 bitcoin’s falls reached rock bottom rates after falling by over 80%. This same trend is observable from the epic crash that characterized 2017-2018.
The dips in prices of 2019-2020 and 2021 were merely -61% and -54% respectively and gleaning from these on-chain data, Pantera Capital makes their assertion. Dan Morehead, the firm’s CEO surmised that future bear markets will be “shallower” and that his earlier predictions ring true.
“I long advocated that as the market becomes broader, more valuable, and more institutional, the amplitude of price swings will moderate,” says Morehead. Less severe bear cycles from a decline in selling sentiments mean an upward trajectory for the asset’s price that points to a strong bull run.
Bitcoin presently trades above $60,000 and is within reach of breaking its all-time high. A series of factors are in play for bitcoin including the launch of Bitcoin ETFs that will increase institutional investments into the asset.
No More 100x Rallies
Morehead uses the stock-to-flow model to deduce that Bitcoin to $100,000 is in play especially given the antecedents of bitcoin halvings. Bitcoin’s first halving spurred a 9,212% rise while the second halving resulted in a rally of 2,910%. The last halving in May 2020 has so far resulted in a gain of 720% and it’s easy to see the reduction in gains with every halving.
Morehead comments that it would be rare to see any “more of the 100X-in-a-year rallies”. He surmised that “the cycles shown logarithmically make todays’ level look cheap to me”. Several analysts have predicted that Bitcoin could reach #100K before the end of the year including Bloomberg’s Mike McGlone.
“Can bitcoin reach $100,000 in 2021? Five charts show potential- Past bitcoin trading trends and the crypto’s declining supply vs. mainstream adoption suggests a significant advance in 2021, potentially to $100,000, we believe,” says McGlone.