Bitcoin Magazine: Is the Bitcoin Bull Cycle Over?

Bitcoin started the year off on a strong note. The SEC approved 11 bitcoin ETFs for trading. Prices hit a new all-time high in anticipation of that move. In the months since, the price has languished.

The past few months have seen choppy price action and some sizeable selloffs. That’s not the typical behavior of an asset making new highs. In that sense, bitcoin has faltered while assets such as stocks and gold have continued higher.

Historical data from past bitcoin cycles suggests that this is nothing new. The 2016-2017 and 2020-2021 rallies in bitcoin saw similar drawdowns after making new all-time highs. Such pullbacks, while more extreme in bitcoin than other assets, seem critical to fuel the next leg higher.

In the meantime, short-term holders have an average price of about $63,000 per bitcoin. At current prices, many new bitcoin investors may be holding at a loss. Typically, short-term investors will see a loss at some point during a bull market cycle.

Meanwhile, the hash rate of the bitcoin network continues to grow. Typically, prices follow moves in the hash rate higher. That’s another sign that the drop in prices off the peak is a pause, not the start of a protracted rally.

Looking at the data as a whole, while price action has been discouraging lately, bitcoin is still on track to push higher in the months ahead. It simply remains to be seen what catalyst will trigger the move.

To read the full analysis on bitcoin’s price action, click here.