(Kitco News) – The four-year Bitcoin (BTC) cycle is well-known among crypto investors, with those who understand the boom-and-bust pattern of digital assets maximizing their gains by selling at the top – when new investors are just starting to FOMO – and then buying back in at the depths of the ensuing crypto winter when things look their bleakest.
With the Bitcoin halving now in the rearview mirror and the approvals of spot BTC and Ethereum (ETH) exchange-traded funds (ETFs) on the books, the major known catalysts of this cycle are now reflected in the price, and predictions on how the rest of the cycle will unfold have started to roll in.
“Based on on-chain indicators and historical patterns, Bitcoin is expected to reach a peak of at least $120,000 during this cycle,” said analysts at Bitfinex. “While many higher targets are more popular, we believe it is important to ‘react’ to the market rather than predict these months out, and we continue to hold the opinion that most investors are overestimating the top targets as investment into crypto assets broadens away from Bitcoin into instruments such as the forthcoming Ethereum ETFs and other altcoins.”
“Key metrics such as the Market Value to Realized Value (MVRV) ratio indicate significant unrealized profit, with a current MVRV value of around 2.56,” they added. “Historically, Bitcoin market tops occur when the MVRV ratio exceeds 3.2.”
Bitfinex predicts the current Bitcoin cycle will “last until late 2024 or early 2025.”
“Historical data suggest that Bitcoin typically reaches its new all-time high (ATH) several months after the halving event,” they said. “Therefore, analysts predict the market top could occur around Q4 2024. This could change, however, based on the fact that BTC recorded a new ATH before the halving event this cycle. This was the first time this happened.”
As for a specific price target, Bitfinex said they “do not believe in predicting tops via price levels months in advance,” but noted that “it is important to use historically accurate metrics as a yardstick for where we are in the current cycle.”
The MVRV Ratio “Indicates profitability of Bitcoin holdings,” they said. “Values above 3.2 suggest a market top is near. Currently, we're at 2.56 after reaching 2.79 in March as a local peak.”
Hash rate stability also offers insights. “Continuous or increasing hash rate suggests strong miner commitment and network security,” they said.
Kadan Stadelmann, CTO at Komodo, also thinks it's too early to predict how high Bitcoin could rise during the current cycle.
“It's difficult to predict an exact month or date when a major crash will happen, but historically each crypto market cycle lasts four years on average,” he said. “So, if this pattern continues and we say that the current bull market started in early 2024, it’s possible that the cycle peak will be reached around mid-2026. Then, we’ll see the start of a bear market that might last through early to mid-2028.”
“Not financial advice, but I once told some friends that I thought BTC will be roughly $100-120k” at the current cycle’s top, said Eric Chen, CEO of Injective Labs.
Clem Chambers, CEO of Online Blockchain plc, said the crypto market is “at a critical point.”
“Another leg up could see $120,000+, but if we're at the top a return to $30,000 or below is possible for Bitcoin,” he said. “It is easy to be a naysayer, but I see strong arguments for another reprice upwards. After that, I have no opinion.”
“I say to anyone who asks will BTC be $1,000,000 a coin, ‘sure no problem, if a pint of beer gets to be $1000,’” he added. “Beyond that, I think crypto will pivot after the end of this cycle and will offer a complete new set of opportunities outside of currency. As such, I see this cycle - or perhaps the next - being a sea change, so after the cycle completes that is where I’ll be looking for the next set of profits.”
“Meanwhile, I’m still long which is enough to say I think another leg up is more likely than a fall into a new crypto winter,” Chambers concluded.
“As BTC continues to mature as an asset class the volatility will decline,” said Peter Eberle, President and Chief Investment Officer of Castle Funds. “The extreme overreach in bull markets and the extreme crashes of bear markets may well be behind us. Yes, there will still be bull markets and bear markets but the days of -80% may no longer occur.”
As for how long the current cycle will last, Eberle said “It really depends on your time horizon.”
“We are not trying to predict peaks or troughs of 2-4 year cycles. We don’t care,” he said. “We are focused on the longer term and believe that the market cap of BTC will exceed that of gold in the next decade. At current prices that would put BTC above $500,000 by 2034.”
Graeme Moore, Head of Tokenization at Polymesh Association, said he “wouldn’t be surprised to see a price of $200k BTC this cycle.”
“This would align with previous cycles, and is less than a 3x increase from here,” he added.
Moore said that this cycle “could last another 6-12 months,” and his best guess at when the top will hit is February 2025.
“Predicting the absolute peak is a tricky game in crypto,” said Cory Johnson, Chief Markets Strategist at The Futurum Group. “You could easily imagine a long-term cycle that keeps rising above $100,000. But fundamentally, unless there’s better adoption and USE CASES for Bitcoin, it’s purely a game of speculation, not value.”
Agent Gunnar Lovelace from the UNFK platform said Bitcoin will hit $100,000 to $150,000, “but it could be much higher.”
He added that the cycle top could come in the “Mid to end of 2025,” but said it “Could be longer if rates come down and the U.S. economy doesn't tip into recession.”
“Bitcoin is still correlated as a risk asset class with interest rates,” Lovelace said. “Once Fed rates fall further, it should spark an appetite for more risk in the market broadly. In the next few years, I think the market starts to embrace Bitcoin as more than a risk asset and a hedge against the U.S. dollar and U.S. debt broadly. Till then it's a wild ride tied largely to Fed policy.”
Igor Telyatnikov, co-founder and CEO of AlphaPoint, also sees the possibility of BTC surpassing $200k.
“Based on historical data and patterns from previous cycles, we predict Bitcoin will reach a new all-time high (ATH) of $210,000 during this bull run,” he said. “Previous cycles saw Bitcoin’s price increase by 2,107%, 3,103%, and 631% after each respective halving. Using these trends, we estimate a significant upward movement.”
“The projected ATH is derived from analyzing past performance, with each cycle's price increase duration slightly extending each time,” Telyatnikov noted. “This projection considers the cumulative effect of institutional adoption (ETFs crossed $15 billion in net inflows this week for the first time since going live in January), technological advancements (L2s provide scalability to the Bitcoin network), and regulatory clarity (FIT21 Act, Travel Rule, SEC rulings).”
Telyatnikov also highlighted a development multiple analysts observed with each successive bull market.
“Historical data suggests that each Bitcoin cycle tends to last longer than the previous one, with increasing durations of 1,290 days, 1,403 days, and 1,438 days respectively, and ETFs likely impacting the extent of this current bull market,” he said. “Given this trend, we expect the current cycle to last approximately 1,500 days, extending into late 2025, with historical cycles indicating that higher prices are normally expected 6-18 months after halvings.”
“Enhanced market maturity and improved infrastructure contribute to the prolongation of each cycle,” he noted. “External economic factors, such as inflation rates and macroeconomic stability, also play a crucial role in the cycle’s duration, with recent interest rate cuts prompting investors to buy into leverage and debt and global liquidity hitting a record high of $94 trillion.”
When it comes to a top prediction, Telyatnikov said Alphapoint predicts “the new ATH will be reached on October 11, 2025, which is 560 days after the April 19, 2024 halving.”
“This prediction is based on the patterns observed in the last three cycles, where ATHs were achieved 357 days, 511 days, and 546 days after their respective halvings,” he said. “The slightly longer duration between the halving and the ATH in each cycle suggests a similar extension for the current cycle. This timeline aligns with the gradual maturation and stabilization of the market, influenced by growing institutional interest and adoption.”
Predictions for altseason
“A major alt season is anticipated as Bitcoin approaches its peak,” said analysts at Bitfinex. Sectors expected to perform well include Decentralized Finance (DeFi). “Innovations and increasing adoption continue to drive this sector,” they said. “We expect this to be focused around Ethereum mainnet developments as Ether ETFs gain traction; AI and memecoins to be recurring narratives this cycle; and Real-World Assets (RWAs).”
Chen said he believes “we are on the verge of a major alt season. The top-performing sectors will likely be those that can capture mainstream consumer attention or gain significant institutional adoption.”
“I think we’ll definitely see a major alt season in 2024 or 2025, as we did following the 2016 and 2020 Bitcoin halvings,” said Stadelmann. “I think projects that are working on cutting-edge technologies that the market values will experience major growth.”
“Three sectors of the market that could outperform others are DeFi (i.e. especially DEX protocols), Artificial Intelligence, and IoT,” he added. “Even as we see the crypto market moving towards institutional adoption and seemingly away from the DeFi Degen movement to a certain degree, I think institutions are starting to realize that various dApps and blockchain protocols have a legit utility that can transform the entire global financial landscape.”
“There will be a major alt season,” Moore declared with confidence.
“Every cycle, people claim alt season won’t happen this time, retail isn’t coming back, or some new soundbite reason, and then it does, like clockwork,” he said. “The most exciting sector of crypto is Real World Assets (RWAs). Billions and billions of dollars of real economic value is coming onchain thanks to RWA blockchains and protocols. Dog coins are only interesting for so long; it’s time for real-world assets.”
“The Ethereum ETF buzz is undeniable and has given rise to crypto animal spirits across the board,” said Johnson. “But at the end of the day the functional coins, be it ETH or BTRST, that hold and increase their value.”
“Memecoins, GameFi and SocialFi will dominate,” said Lovelace. “The truly historic dynamic we are in is that we have entered into a true attention economy. When a meme is connected to a liquid asset class like a token, when there is consistent attention to that meme, aligned incentives can be distributed to the stakeholders of that token. It's an incredible flywheel that hasn’t existed before.”
“Lots of trends will rise and fall but the underlying trend makes for incredible use cases,” Lovelace added. “At UNFK we study all of these examples as we look to incentivize engagement in ways that are truly unique around pranking corrupt corporations.”
“In the past 9-12 months, the Bitcoin ecosystem has seen significant developments and growth, particularly in areas of NFTs, DeFi, and meme coins,” said Anjali Young, co-founder of Collab.Land. “The growth of Ordinals, Runes, and BRC20s is a testament to this surge.”
“The Ordinal community, for example, drawing on lessons from the ETH NFT boom of the previous bull, has hit the ground running and expanded rapidly,” she said. “And that traditional approach of simply buying and ‘hodling’ Bitcoin? It's expanding to transacting in various ways - making the landscape more compelling for a new type of retail investor and builder alike.”
“As for altcoins, the current trend suggests we are already in a major alt season, with meme coins and NFTs on Bitcoin (the mother chain of meme coins re: Doge) gaining significant traction,” Young said. “One of the reasons for this shift is the affordability of altcoins, which lowers the barrier to entry for newcomers. And unlike the initial Ethereum NFT boom, which was somewhat singularly focused, we have the current Bitcoin market offering multiple avenues for participation (NFTs and meme coins).”
“Moving forward, it is crucial to focus on broadening accessibility and avoiding complexity. Let's continue to build for the masses; that means tools that make it easier, cheaper, and faster,” Young concluded. “If we can start doing that during the bull run, and not just in the depths of the bear, we are going to see a longer cycle.”
“A major alt season is highly probable as investors seek high returns beyond Bitcoin, with Coinbase’s launch of L2 network Base this summer season likely to expand exposure to DeFi assets for retail markets,” said Telyatnikov.
“DeFi projects will likely be top performers, driven by continued innovation and increased user adoption,” he added. “Layer 2 solutions and interoperability projects are expected to gain traction, addressing scalability and efficiency issues on major blockchains. The gaming and NFT sectors could see substantial growth as they continue to capture mainstream interest and investment. Privacy-focused and Web3 projects might also emerge as significant players, given the increasing demand for decentralized and secure digital ecosystems.”
Catalyst for crypto winter
“Several potential catalysts could trigger the next crypto winter,” according to Bitfinex, including a regulatory crackdown, macroeconomic factors, and market saturation.
“Regulatory Crackdowns: Increased regulatory scrutiny and stricter regulations could reduce investor confidence and lead to market sell-offs,” they said. Regarding macroeconomic factors, “A significant downturn in the global economy or major financial crises could result in a large-scale sell-off of crypto assets,” they warned.
And with market saturation, Bitfinex said “As prices reach unsustainable levels, a natural correction driven by profit-taking and market saturation is expected. Historical patterns show that significant corrections often follow initial bullish phases after the halving.”
Lovelace also pointed to macroeconomic influences.
“Likely some macroeconomic dynamic of recession in the U.S. economy, the U.S. dollar legitimacy and debt levels becoming a central narrative that creates fear and turmoil in the market or some other major shock like an escalation of war with Russia or China,” he said. “Absent that, assuming Fed rates continue to fall and the U.S. economy doesn’t tip into a recession, then the environment should be ripe for continued creativity, growth, and excess.”
Chen suggested that the onset of the next crypto winter will be multi-factorial. “There isn’t usually one single catalyst that sparks a crypto winter. Instead, it often results from a combination of natural market cycles and broader macroeconomic factors,” he said.
Moore aligned with Chen in saying that a number of elements could kick off the next downturn.
“It’s impossible to predict the catalyst that marks the top,” he said. “It could be a war, a large crypto firm blowing up, or no real reason at all; just the market getting exhausted and smart money taking profits. What I can predict is that I’ll continue buying Bitcoin and selling dollars forever.”
Eberle pointed squarely at politics and regulations. “The current U.S. administration is not crypto-friendly, and they could continue their aggressive campaign against the industry,” he said. “However, regardless of what happens in the Presidential Election, we believe that younger members of Congress will continue to migrate to a more pro-crypto stance, which will create a tailwind for BTC.”
Johnson advised crypto investors to “Keep an eye on two potential party crashers: the Fed and Mt. Gox.”
“If the Fed drags its feet on those rate cuts, investors might get cold feet on Bitcoin,” he said. “Treasury yields are strong, inflation is in reverse, the economy is strong, wages are rising, unemployment is at record low and the stock market is booming – those are solid reasons to chase safety in the equities market and safety in treasuries. Why risk crypto in that scenario?”
“And then there’s Mt. Gox coins coming back into the market,” he added. “With trustees poised to dump more than 100,000 BTC on the market, this could swing the supply/demand imbalance for the first time in at least a year for crypto and BTC. That risk might start to explain the $70,000 ceiling for BTC. And it could get uglier if all that coin comes to market at the same time.”
Telyatnikov’s views aligned with those of several other analysts, suggesting “Regulatory crackdowns or unfavorable legislation globally could dampen investor enthusiasm and trigger a downturn.”
“A significant economic recession or financial crisis could lead to a flight to safety, with investors pulling out of riskier assets like cryptocurrencies,” he warned. “Major technological vulnerabilities or hacks could severely impact market confidence and lead to a prolonged bear market.
Telyatnikov also sees the possibility of the futures market sparking the next downturn. “Over-leverage and excessive speculation, if not corrected, could result in a sharp market correction, leading to a crypto winter similar to previous cycles,” he said.
