Bitcoin has seen a continuous increase in value for four consecutive months, marking a streak that has not been seen since the six-month period leading up to March 2021.
Bloomberg's data analysis reveals that when Bitcoin enjoyed a four-month period of consecutive wins in the last 10 years, it was an indicator of an average increase of 260% in the following year. If Bitcoin reaches such a surge, its value could rise to a new all-time high of $105,000 from its current level of around $30,000, where it has seen an 80% recovery from the crypto market crash in 2020 but has recently struggled to progress.
Traders are currently waiting for additional catalysts as Bitcoin's rebound of 72% in 2023 has halted around $30,000, following last year's crypto slump. The rally was driven by predictions of the Federal Reserve adopting more relaxed monetary policies and the belief that the US banking crisis had undermined trust in fiat currency.
“The recent banking-sector crisis has helped to re-establish Bitcoin’s core use case as a decentralized, trustless and scarce digital asset,” Geoff Kendrick, head of the crypto and EM FX West research at Standard Chartered, wrote in a note.
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Source: Bloomberg
As the Bitcoin network approaches its maximum supply of 21 million coins, it has recently achieved a significant milestone of 75% progress towards its next block reward halving. With around 52,500 blocks left to be discovered, this marks another important step in Bitcoin's evolution.
The halving or halving is a process where the rewards given to Bitcoin miners are reduced by half. This occurs once every four years and is aimed at limiting the total number of Bitcoins to 21 million. In April 2024, the next halving is expected to take place. Bitcoin's price has typically increased significantly after each of the previous three halvings.
According to an expert, Bitcoin typically reaches its lowest price point about 12 to 18 months before its halving event, and the current cycle appears to follow this historical pattern. However, there are now many differences, such as a stronger network compared to previous cycles. Additionally, Bitcoin has never experienced a prolonged economic downturn, which adds a new factor to consider.
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Source: Jamie D. Coutts, CMT, CFTe
Various risks continue to pose a threat to Bitcoin and the broader cryptocurrency industry, including but not limited to the US government's scrutiny of the sector and the likelihood of traders scaling down their expectations for more relaxed monetary policies towards the end of the year.
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