Bitcoin has yet to reach the peak of its current appreciation cycle and is likely to surpass its all-time high this year, according to a research report released by CCData on Tuesday.
The report provides a detailed analysis of bitcoin’s historical price movements and the factors influencing its current trajectory.
BTC’s recent performance and ETF influence
In March, Bitcoin achieved an all-time high of over $73,700. However, since then, it has been trading within a range of approximately $59,000 to $72,000.
The ascent to the record high was significantly influenced by the approval and launch of spot bitcoin exchange-traded funds (ETFs) in the U.S. in January.
These ETFs have attracted net inflows of around $14.41 billion to date, according to CCData.
ETFs allow investors to purchase a product that tracks the price of bitcoin without owning the actual cryptocurrency. This has been instrumental in legitimizing bitcoin as an asset class and making it more accessible to larger institutional investors.
How does BTC cycle and halving work?
Bitcoin’s price movements are often described in terms of cycles, characterized by periods of rapid appreciation followed by declines into bear markets or “crypto winters.” Since its inception, bitcoin has completed three such cycles.
A critical event in these cycles is the halving, where the reward for mining new bitcoin blocks is halved, thereby reducing the supply of new bitcoins entering the market.
Historically, halvings have preceded significant price increases, typically culminating in an all-time high months after the event.
However, the current cycle deviated from this pattern as bitcoin reached its latest record high before the halving, driven by the bullish sentiment surrounding the U.S. ETFs.
BTC price projections based on historical trends
CCData’s report suggests that bitcoin has not yet peaked in its current cycle. Analyzing historical trends, the report notes that halving events have always been followed by prolonged periods of price expansion, lasting between 366 and 548 days before reaching a cycle top.
Each halving cycle has been longer than the previous one due to the maturation of the asset class and reduced volatility.
The most recent halving occurred on April 19 this year, meaning the typical post-halving price expansion period is still ongoing. The report observes a decline in trading activity on centralized exchanges for nearly two months following the halving, which aligns with previous cycles.
This pattern suggests that the current cycle could extend further into 2025.
Institutional influence and market behavior
The report also highlights the significant impact of institutional investors in the current cycle, which has altered previous trends.
The involvement of large financial entities has introduced new dynamics, including reduced trading activity in the third quarter, which could indicate more sideways price action in the near term.
Despite this, CCData remains optimistic that any sideways price action is temporary. The firm’s analysts argue that historical data and trends strongly suggest that bitcoin will breach its previous all-time highs before the end of the year.
Where’s Bitcoin headed?
Another factor bolstering bitcoin’s potential for further appreciation is the upcoming launch of an Ethereum ETF in the U.S. and similar products globally. These developments are expected to bring additional capital, liquidity, and demand to the cryptocurrency market.
CCData points to another key historical trend: the majority of bitcoin’s price appreciation occurs over a short period.
In the 2012 cycle, 91.4% of the price increase from halving to the record high happened in the four months before the peak.
This pattern was also evident in the 2016 and 2020 cycles, with 78.8% and 71.5% of the price increases occurring in the four months before the cycle peaks, respectively.
The report notes that such parabolic expansion has not yet occurred in the current cycle, indicating potential for significant upward movement.
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