Thomas Daniels
Analysts are characterizing the recent 22%+ drop in the price of bitcoin as a brief market “shakeout” rather than the conclusion of its traditional four-year cycle.
Analysts contend that Bitcoin’s long-term positive trajectory is unaffected by the broad fears of investors. According to data from Cointelegraph Markets Pro, the cryptocurrency is now trading at $82,680, down from its peak of almost $109,000 on January 20.
Although the attitude surrounding Bitcoin has frequently fallen into “Extreme Fear,” past patterns indicate that such severe corrections frequently come before a robust recovery. Key technical indications have become bearish, according to Bitfinex analysts, raising concerns about the cycle’s early termination. They did, however, stress that declines in bull markets are normal, saying:
“Previous patterns indicate that this might be a shakeout instead of the beginning of an extended bear market.”
The Four-Year Cycle of Bitcoin and Institutional Adoption
Some have questioned the conventional four-year Bitcoin cycle in light of the emergence of U.S. spot Bitcoin exchange-traded funds (ETFs), which momentarily exceeded $125 billion in cumulative holdings, as well as a surge in institutional investment. In spite of this, the Bitcoin halving’s historical influence continues to play a significant role in price fluctuations.
Bitcoin’s compound annual growth rate (CAGR) has fallen to a record-low 8%, according to Iliya Kalchev, dispatch analyst at Nexo, raising questions about whether the conventional cycle is still relevant. But Kalchev contends that:
“Even though Bitcoin has benefited greatly from strong institutional adoption, its halving events are still anticipated to have a lasting impact.”
The price of Bitcoin has increased by more than 31% after the April 20, 2024, halving, which decreased block rewards to 3.125 BTC per block. This has increased market participants’ excitement.
Market Prospects: Crucial Assistance and Association With Stocks
Although analysts caution that Bitcoin’s price movements are still tied with traditional markets, the cryptocurrency’s daily close above $84,000 on March 15 was a positive development. Bitcoin’s next significant move is probably going to be shaped by broader economic factors, such as global treasury yields and equities market performance, although Bitfinex analysts point out that $72,000–$73,000 is still a crucial support zone.
Although market projections have taken trade war concerns into account, analysts warn that a protracted economic slowdown might depress mood. But if past trends continue, Bitcoin might be ready for yet another surge in its current bull market.
