In this photo illustration, the digital cryptocurrency Bitcoin is displayed in Paris, France on March 5, 2024.
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Bitcoin A research report released by CCData on Tuesday showed that the current appreciation cycle has not yet reached its peak and may break through to a record high this year.
Bitcoin hit an all-time high above $73,700 in March but has since been trading between about $59,000 and $72,000.
The record high in March was mainly due to the approval and launch of a spot Bitcoin exchange-traded fund (ETF) in the United States in January. They have attracted about $14.41 billion in net inflows so far, according to CCData.
ETFs allow investingsInvestors purchase products that track the price of Bitcoin without owning the underlying cryptocurrency. Cryptocurrency proponents say this helps legitimize the asset class and make it easier for large institutional investors to participate.
The Bitcoin “cycle” is the period during which the index currency rises to new record highs and then falls again into a bear market or “crypto winter.” These cycles — three of which Bitcoin has completed since its launch — tend to follow similar patterns.
This mainly revolves around an event called the halving, during which miner rewards are cut in half, reducing the supply of Bitcoin on the market.
Typically, halvings usually occur months before Bitcoin hits a new all-time high for the cycle. The current cycle is different. Bitcoin rises to latest record high ahead of halving on bullish U.S. ETFs
With Bitcoin trading in a range off its all-time highs, many are questioning whether the cryptocurrency has reached the top of its current cycle.
CCData’s report looked at the historical trends in Bitcoin prices and the results show yes. The data and research firm said that historical trends show that halving events are always preceded by a period of price expansion, which can last from 366 days to 548 days. “Each halving will experience more damage than the previous one before generating a cycle top.” “longer cycles” due to asset class maturation and reduced volatility. “
The last Bitcoin halving occurred on April 19 of this year, so these historical time frames have not yet passed.
CCData said: “In addition, we have observed a decline in trading activity on centralized exchanges in the nearly two months after the halving events of previous cycles, which seems to reflect this cycle. This indicates that the current cycle may be Further expansion to 2025.
The analysts acknowledged that the “influence of institutional industry players” in the current cycle has “changed previous trends,” adding that trading activity is likely to be lower in the third quarter, which in turn could indicate more sideways movement in prices. trend.
“However, the data and prior trends are strong enough to suggest that any sideways price action is transitory and we are likely to breach the previous all-time high again before the end of the year,” CCData said.
The company’s report said that the upcoming launch of an Ethereum ETF in the United States and other similar products globally is “destined to bring additional capital, liquidity and demand to the asset class.”
CCData highlights another key historical data point that supports its argument – Bitcoin’s price appreciation occurred over a short period of time. For example, in the 2012 cycle, 91.4% of Bitcoin’s overall price expansion from halving to all-time highs occurred in the four months preceding the peak of the cycle. This share of price gains stood at 78.8% and 71.5% in the four months before record highs in the 2016 and 2020 cycles respectively.
“This parabolic expansion has not yet occurred in the current cycle,” CCData said.
Other commentators highlighted how Bitcoin’s historical patterns play out.
“Historically, market cycles peak 12 to 18 months after Bitcoin halvings, with the last halving occurring in April of this year. We have also not seen volatility reach previous peaks. Finally, previous market cycles The peak coincides with the occurrence of all Bitcoin halvings in rapid succession.
“We haven’t triggered any of those signals yet.”
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