CCData released a report stating that Bitcoin has not yet reached the peak of its current appreciation cycle, as the period of price expansion after the halving event has not yet passed. In addition, the launch of more crypto spot ETFs, such as Ethereum ETF, will further boost demand for cryptos.
According to the research report released by CCData on Tuesday, bitcoin has not yet reached the peak of the current appreciation cycle and may surpass its historical high this year.
Data shows that Bitcoin hit a record high of more than $73,700 in March this year, but has been fluctuating between about $59,000 and $72,000 since then. The record high in March was mainly due to the approval and launch of spot Bitcoin ETFs in the United States in January. According to CCData, these funds have attracted net inflows of about $14.41 billion so far.
Spot Bitcoin ETFs allow investors to buy products that track the price of Bitcoin without owning the underlying cryptocurrency. Cryptocurrency supporters say this could help legalize the asset class and make it easier for large institutional investors to participate.
It is reported that the Bitcoin "cycle" refers to the period when digital currency rises to a new high, then falls again into a bear market or "crypto winter". Since the launch of Bitcoin, this cycle has been completed three times, usually following a similar pattern, which revolves around the "Bitcoin halving" event, during which miners' rewards are halved, reducing the supply of Bitcoin in the market.
Usually, the halving event occurs a few months before Bitcoin reaches a new high in the cycle. But this cycle is different because Bitcoin reached its latest all-time high before halving due to the optimism brought by spot Bitcoin ETFs.
Currently, as Bitcoin enters the range fluctuation after reaching a new high, many people doubt whether Bitcoin has reached the peak of the current cycle.
However, CCData's report believes that Bitcoin can still reach new highs by studying the historical price trends of Bitcoin. According to the report, historical trends show that the halving event always heralds the arrival of the expansion period, which may last from 366 to 548 days, "before the cycle peak is reached, each halving cycle will be longer than the previous one, due to the maturity of the asset class and the decrease in volatility."
The report stated that the last Bitcoin halving occurred on April 19th this year, so the expansion period has not yet passed.
"In addition, we observed that in the previous cycles, trading activities on centralized exchanges declined within almost two months after the halving event, which seems to be reflected in the current cycle. This suggests that the current cycle may extend to 2025," according to CCData.
The report acknowledges that the "influence of institutional participants in the industry" in the current cycle has "changed previous trends," and adds that low trading activity may occur in the third quarter, which in turn may imply more lateral price movements.
"However, the data and previous trends are strong enough to indicate that any lateral price movement is temporary, and we may break the previous historical high again by the end of this year."
The report also stated that the upcoming Ethereum ETF in the United States and other similar products around the world "are bound to bring more capital, liquidity, and demand to this asset class."
In addition, another important historical data supporting CCData's view is that Bitcoin's price rise occurred in a short period of time. For example, in the 2012 cycle, 91.4% of the increase in Bitcoin's price during the period from halving to reaching the historical high occurred in the first four months before the peak of the cycle. In the cycles of 2016 and 2020, the percentage of total increase in price that occurred in the four months before reaching historical highs was 78.8% and 71.5%, respectively.
"This parabolic expansion has not yet occurred in the current cycle," CCData said.
However, analysts also pointed out that although Bitcoin's trend has historical patterns, there are no signals yet to trigger new highs. Thomas Perfumo, director of Kraken's strategic department, said that historically, market cycles peak 12 to 18 months after Bitcoin halving, and the last halving occurred in April this year. We haven't seen volatility reach previous highs. Finally, the previous market cycle peaks coincide with rapid consecutive new highs-in 30 days, 10 to 20 new highs were achieved-but we have not triggered any of these signals."
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