Bitcoin bull run goes parabolic, more than doubling in price this year as it nears $9000

If you had told me at the beginning of this month of May, just 27 days ago, when Bitcoin was at around $5200, that by today, just four weeks later, Bitcoin would be about to breach $9000, I would not have believed you. And yet here we are. Today as of writing this Bitcoin is less than $100 away from $9000 on the Coinbase chart. We are looking at a roughly 70% gain in the past month for Bitcoin.

Let’s all agree that the bull market is here, and the bear market of 2018 is over. The low was in at $3200 on 17 December, exactly a year to the day that Bitcoin hit its ATH just below $20 000. Since that low of $3200 we have already gained around 180% in this year’s bull run. If you had bought the bottom, you would be up 180% today. Having fallen or retraced about 84% since the ATH (to the recent regional low in this bear market cycle of $3200) is a standard move for Bitcoin and now the price is just climbing and climbing.

The real parabolic moonshot that we currently see really began on 2 April at $4100 and has rocketed up a total of 116% to today’s price near $9000, all in a matter of 56 days. So you would have more than doubled your money in the past two months. These are the Bitcoin stories we liked to hear in the previous bull run of 2017, when profits were just flowing in all day long, as traders were going long without fear of a retracement or swap in trend. The trend is your friend, and has been a bullish trend for the past five months already.

There have been the occasional 20% retracements of course, like the one over 16/17 May, and this is normal for a healthy and particularly sustainable price growth in any asset over time. We have the convergence of price action plus time and if the price move is too rapid, it will be obliged to retrace further, consolidate and then push higher. The current parabolic price rise is inspiring though it has been a bit fast, suggesting that a retracement is due at some point.

I was already expecting a retracement since $6000 to be honest, yet we just kept climbing. In fact no one can really say for sure now just when or where this Bitcoin rally will top out, with a “blow off top”, like the one we saw at the ATH of 17 December 2017. Price will shoot up and then retrace just as sharply, only to drop back perhaps 40% for example. Of if you know about the Fibonacci retracement levels, then price will fall back to the 0.618 level or thereabout. If we take $4127 to be the low on Coinbase from which the bull spike occurred on 2 April, and we draw the Fibonacci line up to the top at $8956, then the 0.618 retracement will probably occur at $5972. Of course, we don’t know if our current top is the ultimate top of this move so our Fib levels are speculative and based on current data as it stands, though it may change if price climbs still higher today or tomorrow, which it might.

I’m screaming "retracement incoming", as are other traditional Technical Analysts, but Bitcoin doesn’t listen to technicals at times like these. It simply does its own thing, and all we can do is observe and wait and then react accordingly. Some are saying the momentum will still carry us up to $10 000 before this uptrend is over and the pull back ensues. That will take us to the high of last May, one year ago, which may now act as resistance on the way up.

The $6000 resistance was smashed through recently, as if it never existed during this month’s rapid price climb. So nobody knows what will happen next, but another continuation without some kind of healthy pull back would be unusual. Price never simply goes in one direction, but has continual cyclic swings, even within a general trend upward or downward. And the current up trend could do with a little 30-40% retracement without disturbing the overall bullish direction for the year.

From the $8956 top down to the 0.618 retracement level of $5972 is a mere 33.3% dip, which is nothing unusual for Bitcoin over the period of a week for example. Generally the stock market likes to “sell in May and go away” suggesting prices may peak in May and the dip in June, so watch out for that June theme as month end approaches now. Another very low month is traditionally September. Having said that we have to admit that Bitcoin does not follow any particular trend in finance. It is a law unto itself as far as price action is concerned. It is a non-correlative asset. And that may be a good thing in the current delicate times our global economy finds itself in.

Bitcoin could well be that safe haven in times of downturn, like gold or silver. Particularly now that we are officially in the bull market. Some may say we have to wait until price surpasses $11 500 or so, but since the “golden crosses” during April and May, where all lower time frames moving averages, like the 21, 50 and 100 day EMA all crossed the 200 day EMA, it can officially be said that we are in the bull market, and the only way from here is up. There may still be one more 30-40% retracement left, which will drop us back down to that 0.618 level just around that famous $6000, but now it will act as support instead of resistance, and those of us who failed to buy in at the lows and are still sitting with fiat on the sidelines can prepare to buy back in one more time before its good bye to $6000 for ever and no looking back until the next ATH above $20 000.

Some traders and TA specialists may be calling for another drop even as far down as $4/5000 but I wouldn’t hold my breath on that one, due later this year. Just in case it never materializes. You can rather play it safe and set your buy order at just above $6000 to ensure it gets filled, rather than miss the boat entirely because, if you are truly bullish on Bitcoin like me and the general Bitcoin enthusiasts, then it doesn’t matter if you bought in at $4000 or $6000 or $8000, when you know that Bitcoin is still on track to hit $100 000 in the next two years, and perhaps $300 000 in years to come beyond that on its way to $1 000 000. So I’m giving up my opinion that price will still come back down to anything below $6000, and settling with that as my final opportunity to catch the bottom or as near as I can from this angle.

Nobody can time the bottoms or the tops perfectly of any price movement, so we content ourselves with catching the bulk of the move and celebrating the fact that we didn’t lose out altogether. Neutralize lamentation and hankering, by celebrating the fact that it wasn’t a disaster for your portfolio, but was in fact the preservation of wealth first and foremost, and then also some profit on the side. Defending what you already have from loss is the first step in good trading. Then comes accumulation in small increments. That is the secret to long term success in any market as a trader.