Author: The DeFi Investor, Crypto KOL
Compiled by: Felix, PANews
This article will explain where we are in the current crypto cycle and why we are optimistic about the near-term outlook.
BTC cycle investment return rate is at a normal level at this stage of the cycle
In terms of BTC performance, this market cycle is very similar to the bull runs of 2016 and 2020.
Financial markets tend to be cyclical because human nature never changes. This is why it seems unlikely that BTC has peaked.
The past two bull markets have two things in common:
The real BTC uptrend begins about 170-180 days after the Bitcoin halving
BTC cycle top reached approximately 480 days after Bitcoin halving
Just 160 days have passed since the 2024 BTC halving event.
Given past experience, it is very likely that we are only a few weeks away from BTC resuming its upward trend.
While this assumes history will repeat itself, there is no way this bull run will be any different.
Exchange BTC reserves are falling at a record pace
Since January 2024, over 500,000 BTC have been withdrawn from exchanges.
When whales withdraw their tokens from exchanges, it usually indicates that they plan to hold them for a while rather than sell them in the short term.
The above chart shows that whales have been hoarding large amounts of BTC over the past few months.
If this hoarding continues, a supply crunch is imminent.
Historically, Bitcoin Seasons are the first phase of each cycle.
The above chart was made many years ago, but it does a good job summarizing what happened in the 2016 and 2020 cycles.
First, BTC rebounds and its dominance rises
Then, market attention began to turn to mainstream currencies (ETH, SOL, etc.)
Finally, almost every altcoin has started to rise regardless of market capitalization or fundamentals
BTC dominance recently hit a multi-year high.
This may indicate that we are still in phase 1. Historically, altcoin seasons only begin after BTC’s dominance starts to decline. The crypto industry is about to enter phase 2.
Based on all the above charts and historical data from previous bull runs, BTC is likely to hit a new all-time high in Q4.
But there are still some macro uncertainties.
If a global recession sets in, cryptocurrencies will be severely affected.
However, the reason a recession is unlikely in the near term is that this year is an election year in the United States.
To give Harris a chance to win the US presidential election, the Democrats will do everything they can to delay it.
While a US recession may begin sometime in the next 3-4 years, it will definitely not happen in 2024.
Therefore, I am optimistic about cryptocurrencies in Q4. Hopefully, faith and patience will start to pay off soon.
Related reading: BTC successfully breaks through $65,000, investors focus on US PCE data
