Bitcoin’s Recent Bull Run: Learning from 2019’s Peak and Future Indicators

The Rollercoaster of Bitcoin Prices

Bitcoin has become synonymous with the phrase “What goes up must come down”—and today’s price behavior is no exception. Just earlier, Bitcoin (BTC) danced around a peak of $18,476, marking a dazzling 35% jump since early September. If you were anywhere near social media, you probably felt the FOMO as friends posted their winning trades—only to be quickly followed by a drop back to $17,000. Is it just me, or does it feel like we’re stuck in a Groundhog Day movie with these price drops?

Is History Repeating Itself?

Some investors are left scratching their heads, wondering if we’re watching a rerun of the $13,850 peak that was hit back in July 2019. Back in those days, Bitcoin experienced a similar pattern: a triumphant rally followed by an inevitable crash. Buckle up, folks; this is not the only similarity we’re seeing!

A Flash Crash & the Past

Recall that July day in 2019 when we saw a quick flash crash right after Bitcoin hit its glorious high? It was a bit like celebrating your birthday only to trip over your cake. Second only to a 30% decline after that peak, it took Bitcoin a whopping 14 months to regain that glory. Fast forward to our current situation—could we see a similar descent toward a $13,000 low?

Futures Markets: The Crystal Ball of Investor Sentiment

To put this in perspective, we first need to dive into the futures basis indicator, which serves as an emotional temperature gauge for investors. Think of it as the mood ring of the crypto world. If this ring is blue and dark, it means investors are either calm or panicking.

• Premium Displays: While healthier markets usually flaunt a 5% premium, bizarrely, this time around, there wasn’t even a hint of excessive optimism. Current signs indicate a retreat to below 10% right after hitting that $18,500 mark.
• Panic? Maybe Not: In July 2019, even a $2,000 crash wasn’t enough to budge the optimistic undertones. Right now, our indicator shows a rather flat profile—with no significant FOMO spike, making it a tougher crowd.

Options Market: A Different Affair

Just when you thought the bear market of options trading couldn’t get trickier, here comes the 25% delta skew. This indicator measures if investors have an appetite for risk or if they’re huddling in the safety of puts. Interestingly, back in June 2019, despite that thrilling 80% bull run leading up to the peak, option traders seemed more like deer caught in headlights.

Current Market Sentiment

Fast forward to now, and our skew indicator is sitting pretty at an unprecedented -30%. Yes, you heard that right! Traders are so optimistic that they’re willing to pay through the nose for bullish call options.

Final Thoughts: Don’t Just Follow the Crowd

Alright, so before you call your broker and tell them to dive headfirst into the Bitcoin market, it’s key to remember: trading based on just one indicator is like cooking without a recipe. Sure, you might end up with a magical dish—or a big ol’ mess. The differences between the peaks of 2019 and our current situation highlight that a 30% drop isn’t as foreboding as before. Until we see significant shifts, consider putting on your analytical hat and doing some research!