Traditionally, bitcoin’s worth peaks roughly 20 months after a Bitcoin halving. The final Bitcoin halving occurred in April 2024, which suggests we might see a cycle high by December of this 12 months.
The percentages of this are more and more possible as Fed Chair Powell reduce charges by 25 bps at present, giving the roughly $7.4 trillion sitting in money market funds a purpose to come back off the sidelines and transfer right into a hard asset like bitcoin, particularly now that it’s simpler to acquire publicity to bitcoin through spot bitcoin ETFs and proxies like bitcoin treasury companies.
Powell additionally signaled at present that two more rate cuts could be on the way before the year is out, which might solely additional cut back returns in cash market funds, doubtlessly pushing traders into onerous 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” akin 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 conventional monetary index as a reference level, Zeberg sees the S&P 500 exceeding 7,000 earlier than the 12 months is out, whereas Hunter sees it rising to eight,000 (or higher) throughout the similar timeframe.
What’s extra, we could also be witnessing the breakdown of a 14-year assist degree for the US greenback, based on Macro Strategist Octavio (Tavi) Costa, which suggests we might see a markedly weaker greenback within the coming months, one thing else that may assist the bull case for onerous and threat belongings.
What Occurs Come 2026?
Each Zeberg and Hunter consider that, as of early subsequent 12 months, we’ll see the most important 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 financial system grinding to a halt, partly evidenced by the quantity of properties available on the market.
Hunter believes that we’re on the finish of a half century lengthy secular debt-fueled cycle that can finish with a leverage unwind not like something we’ve seen in trendy historical past, as per what he shared on Coin Stories.
Different alerts like mortgage fee delinquencies additionally level to the concept the true financial system is screeching to a halt, which is able to inevitably impact the monetary financial system.
The Bitcoin Downturn Isn’t Assured, however It’s Doubtless
Even when we aren’t headed towards a world macro bust, bitcoin’s worth will take a success 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 tip of 2022 and from nearly $20,000 on the finish of 2017 to simply over $3,000 on the finish of 2018.
In each instances, bitcoin’s worth both tapped or dipped beneath its 200-week customary transferring 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 might 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 might additionally drop effectively 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 similar time, chances are you’ll need to take into account that whereas historical past doesn’t essentially repeat itself, it typically rhymes.
