The historical pattern of Bitcoin’s price peaks approximately 20 months after a Bitcoin halving has many investors speculating on what the future holds for the cryptocurrency. With the last Bitcoin halving occurring in April 2024, experts suggest that we could see a cycle top by December of this year.
Recent events, such as Federal Reserve Chair Powell’s decision to cut rates by 25 bps, have sparked interest in hard assets like Bitcoin. This move has prompted the approximately $7.4 trillion sitting in money market funds to consider alternative investments, with Bitcoin being a popular choice due to the ease of exposure through spot Bitcoin ETFs and proxies like Bitcoin treasury companies.
Furthermore, Powell’s indication that two more rate cuts could be on the way before the year is out adds to the appeal of hard assets like Bitcoin and gold, as well as riskier assets like tech and AI-related stocks. This could potentially lead to a “melt-up” scenario similar to the tech stock surge of 1999 before the dot com bubble burst.
Experts like Henrik Zeberg and David Hunter believe that we are on the cusp of the final parabolic leg of a bull run that began in late 2022. Zeberg predicts the S&P 500 exceeding 7,000, while Hunter sees it rising to 8,000 or higher within the same timeframe.
Additionally, Macro Strategist Octavio (Tavi) Costa suggests that the US dollar may be on the brink of a significant decline, potentially supporting the case for hard and risk assets in the coming months.
Looking ahead to 2026, Zeberg and Hunter foresee a major market downturn that could rival the collapse seen in October 1929, leading to the onset of the Great Depression. Factors like a stagnant real economy and rising loan payment delinquencies point towards a potential economic downturn.
While the future remains uncertain, historical data suggests that Bitcoin’s price could experience a downturn in 2026. Past instances have shown significant drops in Bitcoin’s price, often coinciding with a dip below its 200-week standard moving average. Currently, Bitcoin’s 200-week SMA sits at around $52,000, indicating a potential rise to $65,000 before a subsequent drop in 2026.
Ultimately, the future of Bitcoin and the broader market is unpredictable, and it is essential to approach investment decisions with caution. While historical trends can provide valuable insights, they are not definitive indicators of future performance. As always, it’s crucial to conduct thorough research and seek advice from financial professionals before making any investment decisions.