Four years ago, Bitcoin traded steadily for months after a brutal pullback from $20,000. But in the blink of an eye, it then collapsed by another 50%.
It's the start of a brand-new month — but according to some crypto analysts, Bitcoiners shouldn't be feeling too confident.
One of them is il Capo of Crypto, who shared charts comparing BTC's current setup with four years ago.
After the world's biggest cryptocurrency hit a then all-time high of $20,000 back in December 2017 — painful sell-offs were seen.
For most of 2018, BTC had managed to remain above $6,000 — fueling optimism that this would be the bear market bottom.
But the middle of November sparked yet another brutal correction, and by December of that year, Bitcoin was languishing at $3,200.
Parallels are now being drawn to 2022. After hitting lows of $17,708.62 back in June, BTC has been trading in a relatively tight range.
Bitcoin has been struggling to remain above the psychologically significant threshold of $20,000.
Warning what could lie ahead, il Capo of Crypto tweeted:
"New lows are likely this year."
In the 12 months after reaching $20,000 in 2017, Bitcoin languished by 85% and plunged to lows of $3,200.
A similar contraction now would take BTC from highs of $68,700 last November to just $10,305.
However, not everyone subscribes to the view that this is inevitable. They argue growing maturity in the crypto markets means that BTC has been witnessing less volatility to the upside during bull runs — and on the flipside, this should make bearish routs less brutal.
Pound Regains Its Footing
In other developments, the British pound rallied on Monday after the government performed a humiliating U-turn on controversial proposals in its mini-budget.
The markets had been spooked after U.K. Prime Minister Liz Truss had unveiled plans to slash the highest rate of income tax from 45% to 40% — a move that would have benefitted top earners.
Sterling fell to a record low against the U.S. dollar in the immediate aftermath of this policy, prompting calls for a reversal as a matter of urgency.
Confronted with the prospect of a rebellion, Chancellor Kwasi Kwarteng confirmed that the tax cut was being abandoned — amid fears it was unfair on everyday consumers struggling with the cost-of-living crisis. He said:
"We get it, we have listened."
While BTC/USD is up 0.05% over the past 24 hours, the currency moves mean BTC/GBP is down 0.29%.