“Probably The Same Hyperbolic, Rapid Recovery Will Not Repeat”

DataDash host Nicholas Merten says in his latest market review he believes Bitcoin’s recent surge is a relief rally trap as “extreme enthusiasm” spreads across crypto markets. According to the analyst, the price will soon rush towards $29,000 and late risers will lose.

You want to wait until the installations are in front of you. We finally have one now, as we dug into the previous support pocket during the last loop. There is a very good chance that this will serve as resistance, especially after a 100% move in Bitcoin’s price. I want to buy this kind of relief rally short.

According to Merten, Bitcoin will not follow in the footsteps of price action in 2019, as some have suggested. About four years ago, Bitcoin witnessed a 300% rally in just a few months. Many popular names think that we will experience a similar process again and are trying to adapt the current price chart to that period.

We probably won’t be repeating the same hyperbolic, rapid recovery we experienced in the last cycle, at least to that extent, roughly speaking 300% movement. From the bottom up, this was a massive expansion in Bitcoin’s price, a much bigger move that continued over a longer period of time. So far, we’ve seen about 100% movement. So I really don’t like people making this comparison. What I think is much fairer on a percentage basis, and more relevant to what we’re going through right now, is the same relaxation rally trap that is constantly being played out during this bear market.

Note the pattern we may very well be repeating here, a 139% move from the mid-cycle correction lows here in June 2021. And in about 20 weeks, we’ve seen Bitcoin rally 139%, but fall back at a time when everyone was convinced it was the super-cycle, the dollar collapsing, and that Bitcoin was the super asset to head towards $100,000. What happened then? We entered a brutal bear market, a downtrend for several months.