Bitcoin’s price has lost a lot of ground in the past few weeks. It’s down by $20,000 since the most recent peak of $69,000 in November. This has caused a lot of speculation in the cryptocurrency community whether the tides have turned again and if the bears have taken complete control.
PlanB, though, believes this is not the case and maintains that $69,000 was not the top of this halving cycle.
$69K Was Not The Top: PlanB
November is historically one of BTC’s best months, and the 2021 edition didn’t disappoint at first. The asset started the month at around $60,000 and less than two weeks later broke its previous all-time high and tapped $69,000 to set a new record. This meant that bitcoin was up by 140% since the start of the year.
This is where the situation started to change rapidly, and BTC found itself below $60,000 at the end of the month. The landscape further worsened last week when the primary cryptocurrency dumped by $16,000 in hours to $42,000. As of now, it stands around $49,000, which means it’s roughly 30% below the ATH.
Somewhat expectedly, such a substantial retracement in less than a month gave power to the critics who started referring to the $69,000 line as the cycle top and predicted an impending bear market.
However, PlanB doesn’t think so. The popular anonymous analyst, perhaps best known as the creator of the stock-to-flow model, recently asserted that a typical bear market means an 80% correction. In other words, this would put BTC’s price at $14,000, which is below the 2017 ATH of $20,000 and, more importantly, below the 200 weekly moving average.
As the chart below demonstrates, bitcoin has never dropped below the 200WMA, and PlanB believes it “will never happen.”
I don’t think $69K was the top for this halving cycle.
If $69K were the top, than a typical bear market -80% drawdown would bring the bottom to $14K .. below 2017 ATH ($20K) and below 200WMA ($18K). Nah, that has never happened and IMO will never happen. pic.twitter.com/HYo8Pb1E3F
— PlanB (@100trillionUSD) December 10, 2021
What About Bitcoin’s Growing Adoption?
Back in 2017 and especially in 2018, BTC indeed entered a year-long bear market in which its price dropped by approximately 80%. However, there’re some very significant differences between now and then, particularly in terms of adoption.
There were no giant corporations, such as Tesla, Square (Block), and MicroStrategy that had poured billions of dollars into the asset and held it on their balance sheets. There were no exchange-traded products, whether spot or futures, anywhere.
There were very few institutions that had dipped their toes, while their number frequently increases now. There wasn’t a country that had legalized BTC. There were no banks that acknowledged the cryptocurrency or wanted to do anything with it at all, let alone filing for BTC ETFs of their own.
Separately, the 2017 rally was mainly driven by retail investors who didn’t want to miss out on any quick profits from the new hot thing (for them) called bitcoin. Now, though, retail seems far behind, while the aforementioned institutions, large corporations, or even banks seem to be the main driving forces.
Last but not least, bitcoin is getting widely adopted in terms of a payment method across countless merchants. While it’s still uncertain how many people actually prefer to spend their coins rather than HODL them, the growing adoption is quite undeniable.
All of the above gives more merit to PlanB’s claim that it will be more challenging for the bears to bring the price down 80% from the recent all-time high.