Bitcoin’s Next Move: A New All-Time High on the Horizon?
As the world’s largest cryptocurrency, Bitcoin, continues to experience volatility, many are wondering what’s next for the digital asset. Despite recent fluctuations, history suggests that a new all-time high could be on the horizon, potentially reaching unprecedented heights by mid-January.
A Familiar Pattern Emerges
According to crypto research firm K33, the average duration from Bitcoin’s first to last all-time record high during each cycle has been 318 days. With Bitcoin hitting its first record high on March 5, investors may see the crypto reach a new, final peak this cycle on January 17, 2025, if the average duration of previous cycles repeats.
The Four-Year Cycle
Crypto analysts often divide Bitcoin’s price performance into four-year cycles, each consisting of four phases: breakout, hype, correction, and accumulation. These cycles are primarily based on the schedule of Bitcoin’s halving, a mechanism to control the crypto’s supply where the reward for Bitcoin mining is cut in half.
A Peak in Sight?
If Bitcoin does reach a cycle peak in mid-January, it would be close to Donald Trump’s inauguration as U.S. president, which falls on January 20. Using estimates based on previous cycle-peak prices, Bitcoin may reach a peak at $146,000 this cycle. Alternatively, when using previous market capitalization as reference, Bitcoin could hit a top at $212,500 this cycle.
A Word of Caution
While historical data can provide valuable insights, it’s essential to remember that Bitcoin has a relatively short history as an asset, and its historical price data may not be meaningful enough. Additionally, past performance is not always indicative of future performance.
Current Market Sentiment
As the year draws to a close, the sentiment in the crypto market appears to be softening. Spot Bitcoin exchange-traded funds have seen three days of consecutive outflows, and while MicroStrategy Inc. has acquired more Bitcoins, its smallest purchase in recent weeks has raised questions about its appetite at these levels.
Technical Analysis
From a technical perspective, a relief rally back towards $100,000 would be a natural reactionary move to the upside following the sudden weakness after the Fed last week. If Bitcoin breaks above congestion resistance on the daily chart between $100,000 and $101,500, a retest of the current closing and intraday records between $106,000 and $108,000 would become extremely likely.
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