Traditionally, bitcoin’s worth peaks roughly 20 months after a Bitcoin halving. The final Bitcoin halving occurred in April 2024, which suggests we may see a cycle high by December of this yr.
The percentages of this are more and more seemingly as Fed Chair Powell minimize charges by 25 bps as we speak, giving the roughly $7.4 trillion sitting in cash market funds a motive to come back off the sidelines and transfer into a tough asset like bitcoin, particularly now that it’s simpler to acquire publicity to bitcoin by way of spot bitcoin ETFs and proxies like bitcoin treasury corporations.
Powell additionally signaled as we speak that two extra fee cuts may very well be on the best way earlier than the yr is out, which might solely additional scale back returns in cash market funds, doubtlessly pushing traders into laborious belongings like bitcoin and gold in addition to riskier belongings like tech and AI-related shares.
This might catalyze the ultimate leg of a “melt-up” corresponding to what we noticed with tech shares on the finish of 1999 earlier than the dot com bubble burst.
Additionally, very similar to the likes of Henrik Zeberg and David Hunter, I consider the stage is being set for the ultimate parabolic leg of a bull run that started in late 2022.
Utilizing a standard monetary index as a reference level, Zeberg sees the S&P 500 exceeding 7,000 earlier than the yr is out, whereas Hunter sees it rising to eight,000 (or greater) throughout the identical time-frame.
What’s extra, we could also be witnessing the breakdown of a 14-year help degree for the US greenback, based on Macro Strategist Octavio (Tavi) Costa, which suggests we may see a markedly weaker greenback within the coming months, one thing else that will help the bull case for laborious and threat belongings.
What Occurs Come 2026?
Each Zeberg and Hunter consider that, as of early subsequent yr, we’ll see the biggest bust throughout all markets that we’ve seen since October 1929, when monetary markets within the US collapsed, spurring the onset of the Nice Despair.
Zeberg’s rationale for this consists of the true economic system grinding to a halt, partially evidenced by the quantity of properties in the marketplace.
Hunter believes that we’re on the finish of a half century lengthy secular debt-fueled cycle that can finish with a leverage unwind in contrast to something we’ve seen in fashionable historical past, as per what he shared on Coin Tales.
Different alerts like mortgage cost delinquencies additionally level to the concept that the true economic system is screeching to a halt, which is able to inevitably affect the monetary economic system.
The Bitcoin Downturn Isn’t Assured, however It’s Possible
Even when we aren’t headed towards a world macro bust, bitcoin’s worth will take successful in 2026 if historical past repeats itself.
That’s, bitcoin’s worth dropped from nearly $69,000 on the finish of 2021 to roughly $15,500 by the top of 2022 and from nearly $20,000 on the finish of 2017 to only over $3,000 on the finish of 2018.
In each circumstances, bitcoin’s worth both tapped or dipped beneath its 200-week customary shifting common (SMA), the sunshine blue line on the charts beneath.
At the moment, bitcoin’s 200-week SMA is sitting at about $52,000. If we see a parabolic rise in bitcoin’s worth within the coming months, it may rise as excessive as $65,000, earlier than bitcoin’s worth drops to such a worth level or decrease a while in 2026.
If we do see the kind of bust that Zeberg and Hunter are forecasting, bitcoin’s worth may additionally drop properly beneath that threshold.
With all of that stated, nobody is aware of what the long run holds, and please don’t interpret something on this article as monetary recommendation.
On the identical time, you might need to remember that whereas historical past doesn’t essentially repeat itself, it typically rhymes.
