Traditionally, bitcoin’s value peaks roughly 20 months after a Bitcoin halving. The final Bitcoin halving occurred in April 2024, which implies we might see a cycle high by December of this yr.
The chances of this are more and more possible as Fed Chair Powell reduce charges by 25 bps at this time, giving the roughly $7.4 trillion sitting in cash market funds a purpose to come back off the sidelines and transfer right into a onerous asset like bitcoin, particularly now that it’s simpler to acquire publicity to bitcoin through spot bitcoin ETFs and proxies like bitcoin treasury firms.
Powell additionally signaled at this time that two extra fee cuts might be on the way in which earlier than the yr is out, which might solely additional cut back returns in cash market funds, probably 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” corresponding to what we noticed with tech shares on the finish of 1999 earlier than the dot com bubble burst.
Additionally, very like 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 yr is out, whereas Hunter sees it rising to eight,000 (or increased) throughout the identical 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 implies we might see a markedly weaker greenback within the coming months, one thing else that will assist the bull case for onerous and threat belongings.
What Occurs Come 2026?
Each Zeberg and Hunter consider that, as of early subsequent yr, 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 contains the actual economic system grinding to a halt, partly evidenced by the quantity of houses in the marketplace.
Hunter believes that we’re on the finish of a half century lengthy secular debt-fueled cycle that may 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 indicators like mortgage cost delinquencies additionally level to the concept the actual economic system is screeching to a halt, which can inevitably impact the monetary economic system.
The Bitcoin Downturn Isn’t Assured, however It’s Probably
Even when we aren’t headed in the direction of a worldwide macro bust, bitcoin’s value will take successful in 2026 if historical past repeats itself.
That’s, bitcoin’s value dropped from virtually $69,000 on the finish of 2021 to roughly $15,500 by the top of 2022 and from virtually $20,000 on the finish of 2017 to simply over $3,000 on the finish of 2018.
In each instances, bitcoin’s value both tapped or dipped beneath its 200 Week Commonplace Shifting Common (SMA), the sunshine blue line on the charts beneath.
Presently, bitcoin’s 200 Week SMA is sitting at about $52,000. If we see a parabolic rise in bitcoin’s value within the coming months, it might rise as excessive as $65,000, earlier than bitcoin’s value drops to such a value level or decrease a while in 2026.
If we do see the kind of bust that Zeberg and Hunter are forecasting, bitcoin’s value might additionally drop properly beneath that threshold.
With all of that mentioned, 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, it’s possible you’ll wish to remember the fact that whereas historical past doesn’t essentially repeat itself, it typically rhymes.
