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The Google search trend for the terms “bitcoin” and “cryptocurrency” began spiking again in November but still remain below their peak in 2017.
Search trends have historically had a strong correlation with the price. So it is not surprising to see it spike as bitcoin has surged to a new record high price.
The chart below shows search volume for bitcoin over the last 12 months with a sharp spike in interest beginning in mid-October.
Google’s numbers indicate that interest right now is the highest it’s been since the cryptocurrency market corrected in 2018. And it is more than double normal volume for 2020.
Yet a chart of worldwide bitcoin search volume for the last 5 years provides more perspective for the latest spike.
In 2017, bitcoin’s price went from $1,000 in January to nearly $20,000 at the end of the year. During that time we saw search volume gaining momentum before going parabolic in direct correlation with market prices.
Does this trend foreshadow even higher prices or just reflect what has already occurred?
Well, technical analysis of any market chart is a measure of psychology. As price goes up, more news is reported about cryptocurrency and thus more people become interested. This hype pattern is a feedback loop that encourages more people to dip their toes into the market. Before long, FOMO (fear of missing out) sets in and parabolic moves take place.
This new hype cycle is just getting started. In fact some are wondering why yesterday’s new all-time high hasn’t resulted in bigger news coverage.
I think it's really strange we're not seeing the same amount of media hype we did in 2017.
In 2017 they shilled the ATH non-stop, 2020 barely a mention.
Still trying to figure out what that means.
— The Crypto Dood (@The_Crypto_Dood) November 30, 2020
Yet when bitcoin hit a new high in early 2017, the search trend was just getting warmed up. It wasn’t until bitcoin exploded much higher that interest soared.
If the current trend continues, we could see a new bull run for bitcoin and cryptocurrency with a similar pattern. Like everything, there will be peaks and dips, but market psychology tells us that there is more room to run. Much more room.