Although Bitcoin has fallen from its recent high of around $74,000, some analysts are urging investors to remain calm and even see this as a buying opportunity. So far, Bitcoin prices have remained under pressure and have fallen over the past trading week.
Are There Similarities to the 2020 Bitcoin Bull Run?
Although the downside momentum is slowing and there is no confirmation of the April 2 dump, the bulls’ inability to convincingly flow back and take the coin above $71,000 remains a concern for some traders.
Still, an analyst on X takes a bullish stance compares the current formation with that of 2020. Pointing to the cyclical nature of prices and the inevitability of retracements of bottoms and peaks, the trader expects prices to rise.
The trader said that in 2020, as Bitcoin prices fell and shook out weak hands, the recovery led to a bull run that saw the coin rise strongly above its previous all-time highs of $20,000. The analyst appears to be alluding to the pre-breakout retracement as a slingshot that ultimately fueled the “legendary” bull run that saw Bitcoin soar to a high of $70,000.
Based on this comparison, the trader is convinced that, based on history, this could be the best time to “sell” around spot levels. Still, for now, buyers may want to consider doubling down until there is a clear trend definition and the current bear formation is shaken off. Currently, BTC has strong rejections in the liquidation zone from $71,700 to $72,000, marking last week’s high.
Beware of the “dry powder”
In addition to the technical candlestick formation, another trader thinks that buyers can handle a better HODL even if the sellers are in control.
In a post on On April 2, Tether spent 1 billion USDT on Tron, while Circle spent 250 million USDC on Solana.
This development, the analyst said, means there is “enough dry powder”. Stable coins such as USDT and USDC offer stability in the crypto markets, providing crypto holders with a refuge when prices fall.
However, they can also act as conduits for liquidity from the traditional market, giving interested users an opportunity to gain exposure to top coins or even engage in activities such as decentralized finance (DeFi).
In the past, prices often rose higher when there were huge stablecoin coins.
Feature image from Canva, chart from TradingView
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