Bitcoin Bull Run Deja Vu: 2021 Versus 2024
When Bitcoin is trending, it’s important to pay attention. Currently, Bitcoin is in an uptrend, as indicated by the Average Directional Index (ADX).
The ADX is a tool that measures the strength of a trend on any timeframe. When the ADX rises above 20, it suggests an active trend. If it falls below 20, there isn’t enough evidence of a trend.
Right now, the weekly ADX for Bitcoin is above 20 and even above 51. In late 2020, when it reached this level, Bitcoin experienced a significant price increase of 120% over four weeks. If history repeats itself, BTCUSD could reach $94,000 per coin by mid-February.
All About The Average Directional Index
The Average Directional Index (ADX) is a trend-strength measuring tool created by J. Welles Wilder, Jr., who also developed other technical analysis tools.
The ADX consists of two Directional Indicators (DI+ and DI-) and measures the strength of a trend. Currently, the ADX is in the same location as during the late 2020 and early 2021 bull run. This suggests similar conditions for another parabolic rally.
In 2021, Bitcoin peaked when the ADX reached 85 before declining. If BTCUSD surpasses this level, we could see an even stronger rally than expected. However, if it fails to reach above 85 but still sets a new all-time high, a bearish divergence could indicate an impending top in crypto.
The ADX is an important tool for understanding cryptocurrency trends.
Hot Take: Bitcoin Continues to Rally as ADX Shows Similarities with 2021 Bull Run
Bitcoin’s price has surged above $45,000 for the first time since April 2022. The rally shows no signs of stopping, thanks to the weekly Average Directional Index (ADX) indicating a strong trend. The ADX is reminiscent of the 2021 bull run, suggesting the potential for significant price increases.
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