Bitcoin has been unstable since it passed the $100,000 mark earlier this month, but crypto research company K33 says that based on past performance, a new all-time high could be in sight by the middle of January.
The value of the biggest cryptocurrency, BTCUSD -0.36%, rose 6.1% on Tuesday to around $98,679 at the last check. It had been below $93,000 on Monday, but it had risen back up. Bitcoin hit a record high of $108,309 on December 17, but it and stock prices fell last week after the Federal Reserve said it would cut interest rates less in 2025 than officials had thought.
Based on data from the last three rounds, Vetle Lunde, head of research at K33, says that the average time between bitcoin’s first and last all-time high has been 318 days. Bitcoin hit its first record high on March 5 of this cycle. If the average length of previous cycles holds, buyers may see the cryptocurrency reach its last peak of this cycle on January 17, 2025.
Crypto experts often break down bitcoin’s price history into cycles that last four years. During each cycle, the price goes through four stages: breakout, hype, correction, and accumulation. The cycles mostly follow the schedule of bitcoin’s halving, which is when the payout for mining bitcoin is cut in half. This is done to control the amount of bitcoin in circulation. About every four years, the amount is halved. The most recent one was in April of this year.
If bitcoin does hit its cycle high point in the middle of January, it will be close to Jan. 20, which is when Donald Trump is sworn in as president of the United States.
“Trump’s election started the strong fourth-quarter rally, and the inauguration would be a natural way to cap off the momentum, given that political processes usually take time to play out,” Lunde wrote in a recent note.
Lunde wrote that bitcoin may hit a peak at $146,000 this cycle, based on estimates based on previous cycle-peaks. Lunde also said that if you look at the market value from the past, bitcoin could reach a high point at $212,000.
Bitcoin has only been around as an asset since 2009, so it does not have a very long past. Its previous price data may not be useful because the sample size is so small. Also, past performance is not always a good indicator of future performance. Lunde pointed out that bitcoin’s cyclical effects are also becoming less noticeable as the effects of half fade.
Researchers at the crypto trading company QCP Capital wrote in a note on Tuesday that the mood in the market seems to be getting worse as the year comes to a close.
As of Monday, money had been leaving spot bitcoin exchange-traded funds for three days in a row.
MicroStrategy Inc. MSTR +7.81% said on Monday that it had bought another 5,262 bitcoins for $561 million, which is about $106,662 per token. This brought the total number of bitcoins that the software company owned to 444,262. However, the QCP analysts said that this was the company’s smallest purchase in recent weeks, which made them wonder about its appetite at these levels.
Bulls in the stock market are looking forward to a “Santa Claus rally” as we head into the new year. However, this doesn’t always happen with bitcoin.
Bloomberg says that the S&P 500 SPX +1.10% has finished higher 77% of the time during the Santa Claus trading window since 1950. Bit coin, on the other hand, has only gone up half of the time during the 14 Santa Claus periods since 2010. (Yes, bitcoin trades every day, but stocks don’t, so the trading windows at the end of the year are a little different for bitcoin and stocks.)
Tyler Richey, technical analyst and co-editor at Sevens Report Research, told MarketWatch that bitcoin’s trade volumes have been steadily going down since it topped $100,000 earlier this month. This shows that bullish conviction has been fading, Richey wrote.
Still, Richey said that from a technical point of view, a rise back to $100,000 “would be a natural reactionary move to the upside following the sudden weakness after the Fed last week.”
Richey wrote, “If we saw a break above congestion resistance on the daily chart between $100,000 and $101,500, then it would be very likely that the current closing and intraday records would be tested again between $106,000 and $108,000.”
“If they fail to break to new highs, that would be a bearish sign, and support in the low $90,000s would become important again. On the other hand, if they do break to new highs, the technical setup for bitcoin would become bullish again, with a measured move target of $118,000.”
