The Bitcoin price has been performing relatively well recently, especially when one considers the disastrous price action in other markets, particularly in foreign exchange markets.

Despite the volatility of sterling, euros, yen, the strengthening dollar, Bitcoin has fared relatively well in the past few weeks. Rising interest rates internationally could have been construed as something that should send jitters through the Bitcoin market, but thus far it appears to have been faring well.

Bitcoin holds $20k support

Bitcoin has been trading in a narrower and narrower range over the past few months, oscillating around the $20k figure.

It isn’t unusual that in bear markets the relative volatility of such an asset should decline so significantly – the euphoria of markets has abated, and despite Bitcoin’s volatility remaining far higher than other asset classes, such as the stock market, the big moves have died down somewhat over the last months.

Over the last couple of days, Bitcoin reclaimed the $20k threshold and since then has managed to stay above it.

$20k support is the ATH of the 2018 bull market

After the impressive 2017-2018 bull market, the Bitcoin price peaked at $20k, before falling back to $3k.

During the last bull market, the price rallied from just $3k to $69k before retracing to where it is now. Holding a strong position above $20k is an extremely significant psychological level, since it shows that Bitcoin is still in a trend of logarithmic exponential growth.

Could the bear market be over?

One of the reasons for why Bitcoin holding above the $20k support is that it shows that the bear market could, in fact, already be over – if the Bitcoin market has already bottomed, then there may be plenty of upside for investors going forward.

Bitcoin’s current market cap rests at just shy of $400 billion at the moment. When one considers the long-term value proposition of Bitcoin, this may seem like an incredibly small number.

Economists such as Saifedean Ammous have posited the case that Bitcoin’s ultimate goal isn’t to become a digital alternative to gold (in which case the market cap ought to stand around $11 trillion), but to replace the government bond market ($100 trillion). If this is accurate, then one would expect the Bitcoin price, over the next few decades, to rise to a price of $5 million.

This bear market hasn’t been as bad as others

In previous bear markets, the magnitude of Bitcoin’s declines has been far larger than during this one. Even the decline from $69k to $17.5k only represents a 75% drop.

Those who claim that Bitcoin’s volatility ought to preclude it from having a sustainable use case a currency ought to also note that Bitcoin’s volatility has been consistently declining.

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