Bitcoin is the leading and dominant force (+45% market dominance) within the cryptocurrency market and to a large extent determines the price action for the rest of the cryptocurrency market.
When the price of Bitcoin increases, so does the rest of the market. When the price of Bitcoin falls, so too does the rest of the cryptocurrency market. Where Bitcoin goes, the rest of the market tends to follow.
As long as Bitcoin continues to hold the dominant market capitalization within the cryptocurrency space, the movements of Bitcoin will be to a large extent reflected by the rest of the market.
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As we analyze these price movements, some interesting observations and takeaways can be inferred to help with the future price predictions and price movement of both Bitcoin and the cryptocurrency market at large.
2008 - Bitcoin was Born
On 3 January 2009, the Bitcoin network was officially created when Satoshi Nakamoto mined the first block, also known as the genesis block. At this time Bitcoin was the first and only cryptocurrency in existence. Also at this time, there wasn't any method to establish a 'market' price for this cryptocurrency.
Over the next few years, Bitcoin didn't have any exchangeable value until the first Bitcoin exchange was created, which was Mt. Gox. Mt. Gox was first launched in 2010.
Between 2010 and 2013, Bitcoin went from having near zero market value to almost $150 per Bitcoin. It was in May of 2010 when two pizzas were infamously purchased for 10,000 Bitcoins (valued at around $41 at the time).
2013 - The First Bitcoin Bull Market
Bitcoin increases from $145 to $1,200 (May-Dec) +700%
The year 2013 marked the first official bull run for Bitcoin. The price of Bitcoin hovered around $145 for the majority of the year until October when within two months reached its first all-time high of over $1,200.
Soon after, the price of Bitcoin dropped again which was largely blamed on the Mt. Gox hack, and for the next two years, the price of Bitcoin continued to decrease in price until bottoming out at around $230 in September of 2015.
2014 Bitcoin Bear Market
Bitcoin decreased from $800 to $178 (Jan-Dec) - 77%
Following the all-time highs in the Bitcoin Price of over $1,200 in 2013, 2014 would be seen as a bear market for Bitcoin with a continued decline in price, hitting a low of $178 on January 13th, 2015.
2015 Second Bull Market
Bitcoin increased from $178 to $463 (Jan-Dec) +160%
In 2015, the market changed with Bitcoin at the beginning of the year trading around the $200 market and near the end of the year, from September onward realized its all-time highs for the year of almost $500.
2016 Continuation of the Bitcoin Bull Run
Bitcoin increased from $433 to $1,150 (Jan-Dec) +165
In 2016, we see a continuation of the bull run from 2015 with a consistent price increase from $433 at the beginning of the year to an all-time yearly high of $1,150 at the end of the year. Yet again, we see a similar trend in the Bitcoin price hit its all-time high at the end of the year.
2017 - Continuation of the Bitcoin Bull Run
Bitcoin increases from $1,100 to $19,500 (Jan-Dec) + 1,600%
For the last two years, the price of Bitcoin increased with the cumulation of an all-time high of almost $20,000 at year-end.
In January of 2017, Bitcoin was trading at around $1,000, moderately increasing each and every month, until September when Bitcoin was priced at around $4,000 and over the next few months, until December when Bitcoin hit the historic all-time high of almost $20,000.
From January to December of 2017, Bitcoin saw an increase of almost 20x.
2018 - Bitcoin Bear Market
Bitcoin decreases from $19,500 to $3,600
After reaching all-time highs of almost $20,000 in 2017, 2018 was deemed to be a bear market for Bitcoin as the price continued to plummet throughout the year ending the year at an all-time low of around $3,600 in December.
2019 - Runup to the Bull Run of 2020
Bitcoin increased moderately in value
2019 was the first time in 6 years that the high/low price for Bitcoin was not determined at the end of the year. Interestingly, the high for the year occurred (right in the middle of the year) on June 24th, at a price of $13,100.
At the beginning of the year, the price of Bitcoin was around $3,600 and by year-end, the price of Bitcoin was around $7,000.
This is the first time in 6 years that the all-time high/low price for Bitcoin did not occur at the end of the year.
2020 - Bitcoin Bull Market
Bitcoin increases from $8,000 to $39,300 (Jan-Dec)
In January 2020, Bitcoin was trading at around $8,000. The price dropped to a low of $5,550 in March and for the remainder of the year, the price continued to increase moderately. It wasn't until October that we saw a breakout with the price hitting an all-time high on January 8th, 2021 of $39,300 ( a few days later dropping down to $33,900).
From the beginning of the year to the end of the year, Bitcoin increased by almost 400%. Of interest, is the peak price of Bitcoin occurred around December-January, which is an increasingly common theme in Bitcoin price action.
2021 - Continuation of Bitcoin Bull Run
Bitcoin increased from $23,100 to an all-time high of $68,700
In January of 2021, Bitcoin was trading at just over $23,000 and within three months increased to a new all-time high of $63,300 in mid-April. Following this new all-time high, the price decreased to a low of $29,800 in mid-July and subsequently reached a new all-time high of $68,700 in mid-November and then fell to $35,500 by the end of the year.
2021 was a unique year in that there were two all-time highs reached during the year, with Bitcoin reaching an all-time high of just under $70,000.
During this year we also didn't see the all-time high/low take place at the end of the year.
2022 - Bitcoin Bear Market:
Bitcoin plummets from $47,300 to below $20,000
In January of 2022, Bitcoin was trading at around $47,300 dropping to a low of $35,200 and then increasing again to almost the same high (from January) at the end of March.
From March onward, the price of Bitcoin continued to decline, hovering around the $20,000 mark and hitting lows just under $20,000.
It is likely we will see all-time yearly lows for the price of Bitcoin at the end of 2022?
Key Takeaways & Analysis of Bitcoin Price
Since the creation of Bitcoin, there is a very consistent trend in both bull and bear markets for the price of Bitcoin to reach its highest (or lowest) price at the end of the year, depending on whether it's a bear or bull market.
After analyzing the price of Bitcoin over the last 13 years, it can be said with a high degree of probability the price will either drop to its lowest or highest point at the end of the year depending if it's in a bear or bull market, based on its historical price action (there have only been two years where this didn't hold true).
2023 & Future Predictions:
The Bitcoin price is notoriously volatile and in the past, after we have seen new all-time highs reached, the price has declined only to come back again with new all-time highs. The biggest question for most investors is when is the next bull run.
When is the Next Bull Run?
As for the timing of the next bull run, it's been closely associated with what has been known as the Bitcoin Halving Cycle which is where the amount of Bitcoins created is reduced by 50%. This is a programmatically set event to take place once every four years and coincides nicely with the bull and bear markets experienced by Bitcoin as detailed above.
To learn more about the Bitcoin Halving event and its effect on the price of Bitcoin and the next Bitcoin bull run, read this article:
Richard Knight
When to Buy & Sell Bitcoin?
The price of Bitcoin is highly volatile and an excellent indicator that has proved to be very reliable (historically) in determining the best buy and sell prices is the Bitcoin rainbow chart.
The Bitcoin Rainbow Chart is a logarithmic regression curve, colored in a rainbow of colors to help investors determine the best buy and sell prices for Bitcoin.
For more details about this chart and how it functions, read this article:
Richard Knight
Conclusion:
Looking back on the price movements of Bitcoin (and as a consequence, the market as a whole) there is a strong trend for the price during bull markets to reach its peak at the end of the calendar year. If in a bear market, the trend is for the price to reach its low at the end of the year.
While history doesn't always repeat, it does rhyme and alongside the historical price movements if we incorporate other factors such as the Bitcoin Halving event and even the Bitcoin rainbow chart (a logarithmic regression curve) the use of these additional indicators can help in determining the macro price movements of Bitcoin and the market at large.
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