- The cryptocurrency market is equalling, and in some cases bettering, its performance near the peak of the 2017 bull run
- The market cap, the Bitcoin price, and the volume levels are in incredible shape, yet there is still talk of the recent resurgence being a bull trap
- The lack of engagement compared to 2017 shows how early into the bull market we are
Anyone who has been checking out crypto Twitter in the past few weeks would be forgiven for thinking that the cryptocurrency market is in a full blown bull cycle. Bitcoin is comfortably above $10,000, alt coins are handing out three-figure returns, and DeFi shitcoins are the new ICOs. However, there is still some doubt from skeptics that a bull run has even started, illustrating just how tenuous the situation is. The fact that sentiment is still straddling this fine line is suggestive in and of itself, but when you compare this narrative and the statistics supporting it to the data from the last major bull run from 2015 to 2017, it really brings home where we are in the overall cryptocurrency market cycle and what could be about to come.
Cryptocurrency Market Cap Almost Half of All Time High
Back in early December 2017 Bitcoin was barely out of the news, with mainstream media falling over themselves to report on its incessant gains. Within the crypto space, exchanges were failing to cope with the influx of new registrants, crypto-related tweets were a haven for scammers, and crypto trading groups were on fire. The fact that Bitcoin barely gets a mention in the press, exchanges are on easy street, and what few crypto groups still around are almost ghost towns make it clear that, despite the recent resurgence, we are still very far away from the 2017 vintage.
Where the cryptocurrency market is in terms of recovery after the 2017 bull run is a cause for debate, but as we highlighted last week, the total cryptocurrency market cap recently broke above a resistance level of $335 billion set at the 2017 peak, since when it has increased by another $15 billion:
Assuming this level now holds and this isn’t a huge fake out, this historically puts us at September 2015, the point where the 2014-15 bear market gave way to the start of the 2016-2017 bull run. This gives us a ‘starting point’ of $335 billion compared to 2015’s $3.3 billion. This figure is also put into perspective when you realize that $335 billion is the same market cap we saw on December 6, 2017, just a month before the cryptocurrency market cap topped out at $760 million.
To put it another way, $760 billion was the top of the 26-month long 2015-2017 bull run and, two weeks into the new one, we are already at $335 billion. If that doesn’t say something about crypto’s powers of recovery and what could be in store for the coming months then nothing does.
Bitcoin Price Echoes Bullish Sentiment
We can use other metrics to see how well we are doing compared to previous years, such as Bitcoin’s price. On July 27 Bitcoin broke its own 2.5 year downtrend at $9,800, since when it has motored to $11,800, again reinforcing that a bull market has definitely started.
When Bitcoin first hit $9,800 on November 27, 2017 the mainstream media was already screaming about the Bitcoin bubble, crypto trading groups were doing a roaring trade, and newcomers to the space were pouring their life savings into the cryptocurrency market as a result.
The difference between then and now is palpable, with the wider marker once again resembling late 2015 – the selling and accumulation is over and only the hardcore are clinging on, desperately searching for other survivors. And, more or less, no one outside the cryptocurrency market cares.
The difference here of course is that we are starting again at $9,800 rather than $233 as in September 2015, and while comparing 2020 Bitcoin with 2015 Bitcoin is a fool’s errand, the principle still serves as a useful example. Bitcoin took two years and two months to go through a full bull market cycle, serving up an 8,400% return in the process.
Of course we can’t expect anything like the same performance this time round, but given that we are starting out at almost half Bitcoin’s all time high, we can be very confident that by the time the media is crowing about Bitcoin’s return, cryptocurrency exchanges are working through a backlog of registrants, and ‘experts’ are predicting million dollar Bitcoin, the price will be multiples higher than our starting point of $9,800.
Volume Turned up to 11
There is another metric that boosts our belief that 2017’s figures can be eclipsed before a proper bull run is really underway in the cryptocurrency market volume. The 2015-2017 run was almost exclusively retail driven, giving us the following weekly volume levels:
Now let’s throw in the volume from January 2018 to today:
As we can see, the volume throughout 2019 and 2020, while cryptocurrency was still in a bear market, dwarfs by many multiples the volume levels seen during the 2015-2017 bull run. The week that the cryptocurrency market cap broke through its long term bear market resistance at the tail end of last month is so much greater than the same event in September 2015 that you can barely even see it on the chart.
The Crypto Market is Better Than 2017 and No One Cares…Yet
What all this evidence points to is the fact that the cryptocurrency market is equalling and even in some cases bettering its performance during the bull run of 2017, despite the fact that the bull market hasn’t in any way got started yet. This should help offer some perspective to those on both sides of the fence – those who think cryptocurrency is dead and those who worry that things are already as good as they are going to get for Bitcoin.
In 2017 we were in awe of these figures, but right now they are barely worthy of comment. This shows how the level of optimism in the space has shifted, along with the expectations. And all signs point to the cryptocurrency market not disappointing.