If history is a guide, Bitcoin may peak in the next two to three weeks, which means Bitcoin bulls may need to act quickly to lock in profits.
Could Bitcoin peak in two weeks?
According to data from research company K33, Bitcoin is set to reach a historic high in mid-January, just before the inauguration of the incoming U.S. President Trump.
K33's statistical analysis indicates that on average, there are 318 days between the first peak and the last peak of a cryptocurrency cycle. The initial peak of the current cycle occurred on March 5 this year, suggesting that the final peak of the current cycle may occur on January 17 next year. This date happens to be close to Trump's inauguration on January 20.
In fact, Trump's election victory coincidentally became a catalyst for Bitcoin's surge at the end of this year. Trump, as 'the most pro-cryptocurrency president in history', has made several commitments favorable to Bitcoin — such as including Bitcoin in the national reserves, and these factors helped Bitcoin's price break through the six-figure milestone for the first time.
However, K33 pointed out that as the actual time for Trump to take office approaches, cryptocurrency investors are likely to find their hopes dashed:
'The market is very likely to have unrealistic expectations about the speed of policy changes and overestimate the impact of the inauguration... We expect the current Bitcoin rally to peak in mid-January before Trump's inauguration, and we consider this area a natural zone for reducing risk and realizing short-term profits,' K33 research director Vetle Lunde wrote in a report in December.
Other analyses show similar results.
Another technical analyst familiar with Bitcoin's historical cycles, Adrian Zduńczyk, shares a similar view. He had previously warned to prepare for Bitcoin's upcoming pullback. He predicts that Bitcoin's price correction will start between late January and February, with a range of 15% to 30%, before possibly resuming another bull market.
Meanwhile, another study by data analytics company CCData this month also indicated that Bitcoin's price will peak next year, although they predict different timing for the pullback. According to the company, Bitcoin typically reaches its peak 371 to 546 days after the last 'halving' event, which last occurred in April this year.
The company wrote: 'This estimate provides two scenarios: one is a basic scenario predicting that Bitcoin will peak in early Q2 next year, while the other is a bull market scenario predicting that the asset's highest price will peak in November next year.'
The market still has no shortage of bulls.
However, regardless of the outcome in January next year, there remains a large number of people in the market who are optimistic about the cryptocurrency's trajectory for next year, with predictions for Bitcoin's year-end price ranging from $200,000 to $500,000, thanks to sustained institutional adoption, lenient regulation, and the macroeconomic backdrop, as well as a broad rebound in the entire cryptocurrency sector.
Even though CCData, which warned that Bitcoin might pull back, predicts that under basic conditions, Bitcoin could reach $155,000. In a bull market, Bitcoin could touch $195,000.
K33 also acknowledged that as Bitcoin's market capitalization becomes larger, the so-called 'four-year price cycle' may gradually lose relevance.
'The relative impact of the halving is becoming less significant, and Bitcoin is being adopted at the institutional level. Although Bitcoin's bubbles and downturns will still be a common feature, they emerge from new developments,' K33 said.