No more tourists. Once the halving-induced bull starts running, it always draws the momentum crowd. These traders see the bitcoin price rising and they pile on. This causes a bubble that eventually ends, and they get washed out in the months following the peak. Today we have passed the washout point, as evidenced by the average age of bitcoin unspent transaction outputs (UTXO). The tourists are gone, and the HODLers remain.
More bad news can’t cause new lows. Last year had plenty of bad news in cryptoland, and that carried over into bitcoin’s price. Terra, Three Arrows Capital, Celsius Network, BlockFi, Voyager Digital, FTX and others all fell apart. But this year the bankruptcy of Genesis and worries about DCG, Grayscale and Binance didn’t take bitcoin down to new lows. The last of the sellers were already washed out. (CoinDesk, like Genesis and Grayscale, is owned by DCG.)
The cycle repeats: Someday Bitcoin will outgrow its four-year price cycles. Until then, it’s “deja vu all over again.” In the bitcoin bear market of 2014-2015, the price gravitated to around $350 until finally capitulating to $200 and staying there for months. In the bitcoin bear market of 2018-2019, the price gravitated to around $6,000 until finally capitulating to $3,200 and staying there for months. And in the bitcoin bear market of 2022-2023, the price gravitated to around $28,000 until finally capitulating to $16,000 and staying there for months. In each of these cases, the price followed a similar pattern of a peak, a multi-month series of lower price highs and a final capitulation of over 40% that lasted for several months, staying true to the past trends.
