It took 25 days for Bitcoin to double its valuation from its last high of $ 20,000. From December 16 at press time, the rally was unprecedented. The discovery of the BTC price is an estimate for now, despite recent minor fixes.
Bitcoin fundamentals have moved closer to different ATHs. Right now, a definite range of trend reversals is difficult to predict.
However, a fundamental metric indicated the chances of a potential reset going forward.
Bitcoin aSOPR corresponding to the 2017 rally?
According to Rafael Schultze-Kraft, Founder of Glasnode, Bitcoin aSOPR is at a high level comparable to the bullish rally of 2017. He added that the aSOPR reset did not occur for a period of 3 months. Just like it didn’t in the 2017 rally. However, after a 3-month high in 2017, Bitcoin had suffered its withdrawal.
Kraft suggests that the current market remains strongly in the bullish realm. But the particular fundamental correction of the screams in the chart. In the last 24 hours the same was visible.
Is reflexivity replacing the fundamentals right now?
While the fundamentals above may indicate a possible reversal, the fundamentals at $ 25,000, $ 30 and $ 35 also suggest a correction.
With Bitcoin hitting a new high price, the impact of fundamentals has been largely irrelevant. Past resistance levels on measures and charts are outperforming.
This leads to the development of a sociological fundamental called Reflexivity.
Reflexivity is a basic concept of a positive feedback loop that attracts new buyers, during a massive bull rally. With Bitcoin pumping almost 100% in the past 4 weeks. More buyers are flocking and Bitcoin is getting more into the conversation.
It also happened in 2017 with a massive influx in the upper range of $ 18,000 to $ 19,000. However, whenever reflexivity pushes substantial prices above the equilibrium valuation. A possible correction will take place.
The same was happening with Ethereum. The asset has jumped nearly $ 400 + dollars since the start of 2021, as the price moves for no reason or pace. It becomes a case of understanding market engagement and social sentiment, and such a period will also face an expiration.
Caution is extremely important when trading in a reflective market. Fundamentals are becoming less reliable for Bitcoin and other major assets.
Successful investor Jonathan Nowak predicts us on the price of Bitcoin, Ethereum, Litecoin, Chainlink and Binance coin in 2021.
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