Can Bitcoin’s history come full circle once more? That’s the big question on investors’ minds now.
Back on January 20, Bitcoin (BTC) hit an unprecedented high of $109,000. Confidence was high as many anticipated the cryptocurrency would soar even further. Yet, reality had other plans, and Bitcoin has since slid 22% from that peak.
Fortunately, Bitcoin enthusiasts can take solace in its history of bouncing back from setbacks. If past patterns hold, we might see Bitcoin’s value climb again as we move through 2025.
Understanding Bitcoin’s trend involves recognizing its well-established four-year cycles. This rhythm is driven mainly by the Bitcoin halving event, occurring every four years. Each cycle typically includes four stages: accumulation, growth, bubble, and crash.
Historically, the halving has served as a cue for Bitcoin to move from growth into a bubble phase, a period marked by explosive gains that typically lasts between 12 and 18 months.
Look back at the 2020-2021 cycle, for instance. The Bitcoin halving on May 11, 2020, kicked off an exciting rally, pushing Bitcoin to a record-breaking $69,000 by November the following year.
However, the 2015-2017 market cycle remains the highlight for many. Initiated by the July 2016 halving, this cycle almost mirrors the current situation. Bitcoin prices then skyrocketed from around $1,000 to $20,000, and Bitcoin’s trajectory today closely resembles this historical pattern.
Earlier in the year, we saw a staggering 92% correlation with these cycles, and even though that’s dipped slightly to 91%, it remains impressively high. Given this, many crypto backers believe we’re poised to see Bitcoin follow a similar path to 2017’s bull run, eyeing the potential for the digital currency to go parabolic soon.
If you check out the chart from TradingView, you’ll notice Bitcoin’s climb to $20,000 from July 2016 to December 2017 wasn’t smooth or consistent. There were ups and downs, giving some assurance to those uneasy about the current 22% dip.
This backdrop explains the buzz around the April 2024 Bitcoin halving. For those who trust in history’s tendency to repeat, this should’ve signaled a rally leading well into 2025.
However, not everyone shares this optimistic outlook. Some propose that the bull phase might have already peaked. According to them, what we’re witnessing isn’t a pause before another leap forward, but rather the beginning of the end of a brief uptrend. They point out it’s been 12 months since the last halving.
Interestingly, a few analysts propose the bubble phase might have started not with April 2024’s halving, but rather with Donald Trump’s election in November 2024. Taking that into account, an 18-month rally could stretch into 2026. Moreover, consistent support from the White House for crypto could extend this into 2027, with some suggesting that Trump could permanently alter the traditional four-year cycle, ushering in an era of continuous growth for Bitcoin.
While it’s tempting to lean heavily on Bitcoin’s historical cycles when forecasting its future, it’s crucial to stay cautious. Historical trends don’t guarantee future outcomes, and Bitcoin’s adherence to four-year cycles isn’t carved in stone.
To borrow from Mark Twain, “History doesn’t repeat itself, but it often rhymes.” Although Twain wasn’t pondering the twists and turns of Bitcoin, his words certainly apply today. If Bitcoin’s history rhymes just one more time, we might see new record-highs on the horizon in 2025.
