A recent report by the research firm Delphi Digital illustrates the predictable consistency of price action and trends within the crypto market. The report delves into the interconnectedness between the four-year Bitcoin (BTC) cycle and broader economic trends.
According to Delphi Digital analysts, the ongoing consolidation at $30,000 is similar to the period between 2015 and 2017, with indicators pointing toward an all-time high (ATH) for Bitcoin by the fourth quarter of 2024.
Economic cycle’s impact on Bitcoin’s performance
Delphi’s analysis draws attention to the inherent cyclical nature of the cryptocurrency market. This cyclicality is demonstrated by the timing between peak-to-trough bottoms, recovery periods to previous cycle highs and the timing of price rallies to new cycle tops. Using Bitcoin as a benchmark, Delphi outlines the general blueprint of a cryptocurrency market cycle.
These four-year cycles include Bitcoin hitting a new ATH, experiencing an approximate 80% drawdown, then a bottom around one year later. This tends to be followed by a two-year recovery to prior highs and, finally, a price rally for another year leading to a new all-time high.
The research reveals a fascinating correlation between Bitcoin price peaks and changes in the business cycle, as indicated by the ISM Manufacturing Index.
During Bitcoin’s price peaks, the ISM often demonstrates signs of topping out, and active addresses, transaction volumes and fees reach their highest point. Conversely, as the business cycle signals recovery, so do network activity levels.
The report emphasizes the Bitcoin halving’s role in these cycles. The last two halvings occurred about 18 months after
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Author: Marcel Pechman
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