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Bitcoin Likely to Hit New High in 2024

After reaching a record $73,700 in March, Bitcoin has been trading between $59,000 and $72,000
July 3, 2024

Bitcoin's journey is far from over, with experts predicting the cryptocurrency will surpass its previous all-time high by the end of the year. According to a research report released by CCData on Tuesday, Bitcoin's current appreciation cycle is likely to see new heights.

In March, Bitcoin reached a record high of over $73,700. Since then, it has been trading between $59,000 and $72,000. This surge was primarily driven by the approval and launch of spot Bitcoin exchange-traded funds (ETFs) in the U.S. in January, which have since attracted around $14.41 billion in net inflows.

ETFs have played a crucial role in legitimizing Bitcoin, allowing investors to track its price without owning the actual cryptocurrency. This development has made it easier for larger institutional investors to enter the market, adding a new layer of credibility to the asset class.

Bitcoin's price cycles, marked by periods of rapid ascent to record highs followed by bear markets, are influenced by an event known as the "halving." During this event, the reward for miners is cut in half, reducing the supply of Bitcoin in the market. Historically, these halvings precede a period of price expansion.

Interestingly, the current cycle has deviated from the norm. Bitcoin hit its latest record high before the halving event, driven by bullish sentiment around the U.S. ETFs. With Bitcoin's price stabilizing within a range post-all-time high, questions arose about whether it had reached the top of its cycle.

CCData's analysis of historical price movements suggests otherwise. The firm noted that each halving has been followed by a prolonged period of price growth, typically lasting between 366 and 548 days before reaching a cycle peak. Given that the last halving occurred on April 19 this year, the historical timeframes for price expansion have yet to pass.

Additionally, CCData observed a decline in trading activity on centralized exchanges following the halving event, mirroring trends from previous cycles. This suggests that the current cycle could extend further into 2025. The report also emphasized that institutional involvement in the current cycle has altered previous trends, potentially leading to more sideways price action in the short term.

Despite these fluctuations, CCData remains optimistic about Bitcoin's trajectory. The firm expects the cryptocurrency to breach its previous all-time highs before the year ends, driven by historical trends and upcoming developments like the launch of an Ethereum ETF in the U.S.

Supporting this bullish outlook, CCData highlighted that significant price appreciation typically occurs over a short period before the cycle peak. For instance, in the 2012 cycle, 91.4% of Bitcoin's overall price increase happened in the four months leading up to the peak. This pattern continued in subsequent cycles, with 78.8% and 71.5% of price increases occurring in the final months before the peaks in 2016 and 2020, respectively.

As Bitcoin continues to evolve, analysts and enthusiasts alike are keenly watching for signs of another parabolic expansion. Thomas Perfumo, head of strategy at cryptocurrency exchange Kraken, noted that market cycles historically peak 12 to 18 months after a Bitcoin halving. With no significant volatility spikes yet and fewer all-time highs compared to previous cycles, the current cycle still has room to grow.

Bitcoin's future looks promising, with potential new highs on the horizon as market dynamics shift and institutional interest grows. The cryptocurrency's resilience and ability to break records remain key drivers of its ongoing appeal and investment potential.

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