In this photo illustration, a visual representation of the digital Cryptocurrency, Bitcoin is on display in Paris, France, on March 5, 2024.
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Bitcoin has not reached the top of its current appreciation cycle and is likely to go past its all-time high this year, according to a research report released by CCData on Tuesday.
Bitcoin hit an all-time high of above $73,700 in March but has since been trading within a range between roughly $59,000 and $72,000.
The journey to the record high in March was largely driven by the approval and launch of the spot bitcoin exchange-traded funds, or ETFs, in the U.S. in January. They have attracted net inflows to date of around $14.41 billion to date, according to CCData, market data provider focused on digital assets.
ETFs allow investors to buy a product that tracks the price of bitcoin without owning the underlying cryptocurrency. Crypto proponents say this has helped legitimize the asset class and make it easier for larger institutional investors to get involved.
The bitcoin “cycle” refers to the period in which the digital currency ascends to a new record high, then falls again to enter a bear market or “crypto winter.” These cycles — of which three have now been completed since the launch of bitcoin — have tended to follow a similar pattern.
That has been centered around an event called the halving, during which the reward for miners is cut in half, reducing the supply of bitcoin onto the market.
Typically, halving often occurs months before bitcoin hits an all-time high for the cycle. This current cycle has been different. Bitcoin rose to its latest record high before halving due to the bullishness around the ETFs in the U.S.
With bitcoin trading within a range after the all-time high, many have questioned whether the cryptocurrency has reached the top of the current cycle.
CCData’s report, which examined historical bitcoin price movements, suggests it can reach a new height. The data and research firm said historical trends have shown that the halving event has always preceded a period of price expansion that can last anywhere from 366 days to 548 days “before producing a cycle top, with each halving experiencing a longer cycle than the one prior, due to maturation of the asset class and lowered volatility.”
The last bitcoin halving took place on April 19 this year, so those historical timeframes have yet to pass.
“Moreover, we have observed a decline in trading activity on centralised exchanges for nearly two months following the halving event in previous cycles, which seems to have mirrored this cycle. This suggests that the current cycle could expand further into 2025,” CCData said.
The analysts acknowledged that the “influence of institutional participants in the industry” in the current cycle has “altered the previous trends,” adding that low trading activity is likely to take place in the third quarter,