Bitcoin Decreased 22% From Its Peak. History Shows This Will Happen Next

On January 20, Bitcoin (CRYPTO: BTC) reached a new all-time high of $109,000 and many investors believed that this most popular cryptocurrency in the world was about to soar. Unfortunately, that did not happen, as Bitcoin has now fallen 22% from its peak. The good news is that Bitcoin has a long-term recovery track record after similar market downturns. If history is any guide, Bitcoin may be poised to rise in price by the end of 2025. Bitcoin Cycle The first thing you need to know about Bitcoin is that it tends to follow very distinct four-year cycles. The key to the repetitive nature of these four-year cycles is the Bitcoin halving, which happens every four years. Typically, there are four different phases to these cycles: the accumulation phase, the growth phase, the bubble phase, and the collapse phase. Historically, the halving event has provided a signal for Bitcoin to surge in value, as it transitions from a growth phase to a bubble phase. This bubble phase can last from 12 to 18 months and is the period during which Bitcoin achieves its largest gains. Historical Evidence from Previous Bitcoin Cycles For example, let’s look at the Bitcoin bull market cycle of 2020-2021. The Bitcoin halving took place on May 11, 2020. And that, not surprisingly, helped kick off an 18-month bull run that led to the price of Bitcoin skyrocketing to an all-time high of $69,000 in November 2021. It’s impressive, but the price increase in the market that people are talking about right now is actually the market cycle of 2015-2017. This cycle began with the Bitcoin halving in July 2016 and lasted nearly 18 months. The current Bitcoin market cycle seems to be repeating this old market cycle quite accurately. In other words, if you compare the price chart of Bitcoin from these two different market cycles, they will look very similar. And what I mean is, very similar. Earlier this year, there was a 92% statistical correlation between the two market cycles. That correlation has decreased to 91%, but it is still extremely high. As a result, many cryptocurrency investors are now very confident that Bitcoin will continue to follow a similar trajectory as the trajectory it took in 2017, when it eventually rose from around $1,000 to a price of $20,000. This means that Bitcoin could be ready to surge at any time. As can be seen in the chart above, the process of Bitcoin rising to $20,000 from July 2016 to December 2017 was not a vertical trajectory. There were several pullbacks along the way, and there was a long period when it seemed that no breakthroughs would occur. This would bring reassurance to cryptocurrency investors worried about the current 22% pullback of Bitcoin.

And this will help explain why many investors are so excited about the Bitcoin halving event happening in April 2024. If you believe in the logic of repeating historical cycles, then it must be a precursor signal for a Bitcoin price increase lasting until 2025. Does History Repeat Itself? But the issue here is: Some analysts believe that the Bitcoin bull market has ended. What we are currently seeing, they say, is not a form of “consolidation” before a major breakthrough – we are witnessing the beginning of the end of a short-term price rally of Bitcoin. Remember that the bubble phase of the cycle can last from 12 to 18 months and it has now been 12 months since the halving in April 2024. In response, some analysts argue that the bubble phase may not start from the Bitcoin halving event in April 2024. It may actually begin from the presidential election of Donald Trump in November 2024. If you count 18 months from the election, it suggests that the Bitcoin bull run could last until 2026.

And, if the White House can continue to find new ways to support the cryptocurrency market, the Bitcoin bull run could even extend to 2027. Some analysts even argue that Trump has broken the four-year cycle once and for all, and from here on out, there are only rainbows and unicorns as Bitcoin enters an extremely bullish “super cycle.” Advice About Bitcoin From Mark Twain Just be careful when relying too much on Bitcoin’s past history to guide its future direction. Historical performance does not guarantee future results, and there are no immutable laws of the universe that state Bitcoin must continue to follow a four-year cycle – despite the unchangeable halving schedule. Mark Twain once said, “History does not repeat itself, but it often rhymes.” Of course, he was not talking about Bitcoin or the cryptocurrency market, but this advice may be useful when thinking about the current market situation. If history can rhyme once again, then Bitcoin may be heading towards a new all-time high in 2025.