Historical Bitcoin Cycles Show Similar Returns at This Stage
If you look at the data, it shows that the current Bitcoin cycle is lining up against the historical ones in terms of the returns that the asset has seen since hitting its bottom. According to CryptoQuant Netherlands community manager Maartunn, there seems to be a remarkable similarity between the current cycle and the previous ones.
The chart shared by the analyst compares the price performance of each Bitcoin cycle, starting with the bottoms of the respective bear phases.
Based on this chart, all three cycles observed relatively close price action for the first 100 or so days after the formation of the respective cyclical lows. After this point, the cycles showed some divergence. The last two cycles started to converge 300 days after the bottom and successfully did so by the 350th mark. Recently, the current cycle has reached the same milestone and interestingly, it has converged with the others.
Implications for BTC Price
With BTC rallying towards $35,000, it is up approximately 120% since its bottom, similar to returns seen in previous cycles. Following this point of convergence, cryptocurrency moved sideways in both of the previous two cycles. If this trend continues, BTC may also be going through a similar phase of consolidation soon in the current cycle.
Another analyst, James V. Straten, posted today discussing similarities between different Bitcoin cycles from another perspective. In particular, he talked about how the chart of loss supply of BTC long-term holders looks similar for each cycle.
The long-term holders are carrying 2.6 million BTC in loss currently. This level is in line with what the indicator’s value was when cryptocurrency was exiting bear markets in previous cycles.
BTC Price Update
At present, Bitcoin is trading at around $34,800, up 1% in the past week.
Hot Take: Bitcoin’s Historical Cycle Patterns May Signal Future Movements
The analysis suggests that historical patterns may signal future movements for Bitcoin’s current cycle. As BTC continues to rally and converge with previous cycles at this stage, it’s possible that it will follow a similar path as seen before. The implications for BTC’s price are significant as it may enter a phase of consolidation soon based on past trends. Additionally, similarities in loss supply held by long-term holders further reinforce these patterns and provide insights into potential future movements.
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