How does the 2020 Bitcoin rally differ from the one in 2017

Bitcoin recently recorded a record high price of over $ 24,000 and held its value above $ 22K for almost a week. It is currently recovering, and is up 3.69% in the last 24 hours.

High confidence in BTC at the current price

Bitcoin has surged more than 20% in the past week, and is currently trading at $ 23,596.

The last time Bitcoin saw such bullish momentum and growth was in 2017, when It hit its previous all-time high at just under $ 20,000. The BTC has gained much more institutional traction since 2017, including MicroStrategy, Square, MassMutual, Ruffer Investments, among others, investing in it.

Mike McGlone, a senior strategist at Bloomberg, recently commented on the recent bullish growth of the BTC. He noted that there are more resisting BTC sellers this time around, compared to the massive Bitcoin rally seen in 2017. According to the expert, Bitcoin will be less subject to sharp adjustments in 2021 than in 2017. He explained further, pointing to the graph below:

“Maturing optimism, and more persistent sellers: when comparing 2017 vs. 2021, in addition to demand exceeding supply, our comparison of the cue Ball at the beginning of its 15-fold gain in 2017 shows that the maturing asset is less prone to sharp adjustments within its price-setting process”.

While Bitcoin is maturing as an asset, cryptocurrency trader Michael van de Poppe recently noticed that the price of this crypto asset has recently maintained a level of around $ 22,300, and has since started to rise. The trader hinted that this could mean that Bitcoin could potentially reach a new historical high:

“Bitcoin support level has been holding around $ 22,300, and has since started to grow. It is currently in a critical area, which means that maintaining the level higher than 23 350 – 23 425 should trigger a new all-time high before the end of the year”.

Interest in risky but very high returns

According to crypto Analytics firm Glassnode, with Bitcoin rising to the $ 23K mark and returning to the $ 22K level, on-chain fundamentals remain very optimistic for the cryptocurrency. The reserve risk of Bitcoin remains extremely low, despite the fact that the value has reached a new historical high. The Reserve Risk indicator shows the confidence of long-term BTC holders, Glassnode explained:

“When confidence is high and price is low, reserve risk remains low and there is an attractive return risk to invest”.

Since the reserve risk of Bitcoin is in the green zone, as shown in the chart below, this means that there is a high degree of confidence in the price of Bitcoin, despite the bullish upward movement.

Bullish growth in 2017 also showed a similar level of reserve risk, and the flagship crypto asset surged 925% during its rally that year. Glassnode added:

“If BTC followed the same trend in the current market, it would lead to a market top of almost $ 220,000.”