Bitcoin's Path to New Record $146,000: What to Expect in Early 2025?
2min read Bitcoin has experienced significant fluctuations since it breached the $100,000 mark earlier this month. However, historical trends suggest that Bitcoin could set new record highs by mid-January 2025, with the price possibly reaching up to $146,000 or even higher, based on past cycles.
Historical Cycle Patterns Point to January Surge
According to data from K33, a cryptocurrency research firm, Bitcoin's price history typically follows a four-year cycle, largely influenced by Bitcoin's halving events, where the reward for mining Bitcoin is cut in half. This halving event occurs approximately every four years, with the most recent one taking place in April 2024.
Vetle Lunde, the head of research at K33, notes that based on data from the past three cycles, the average duration from Bitcoin's first record high to its final peak within each cycle is about 318 days. With Bitcoin's most recent record high achieved on March 5, 2024, historical patterns suggest that Bitcoin could reach another new peak around January 17, 2025.
The Impact of Donald Trump's Inauguration on Bitcoin Prices
Lunde also highlights that Bitcoin's cycles have been significantly influenced by political events in the U.S., such as the inauguration of Donald Trump. According to Lunde, Trump's election was a key driver of the strong fourth-quarter rebound in 2020, and his January 2025 inauguration could trigger a final surge in Bitcoin prices.
Potential Price Peaks for Bitcoin in 2025
Based on estimates from previous cycles, Lunde projects that Bitcoin could peak at around $146,000 in this cycle. However, if we consider market capitalization comparisons from earlier cycles, Bitcoin could even reach as high as $212,500 during this rally.
Bitcoin's Short History and Decreasing Halving Effect
It's important to note that Bitcoin's history as an asset is relatively short, having only been introduced in 2009. This limited data sample means that past performance might not be a perfect indicator of future price movements. Lunde also points out that the cyclical effects of Bitcoin's halving events have become less pronounced over time, as the impact of each halving has diminished.
Signs of Cooling Market Sentiment
Despite the ongoing volatility, some analysts have noted a cooling of market sentiment. According to a report from QCP Capital, the cryptocurrency market's enthusiasm appears to be waning as the year draws to a close. Notably, Bitcoin's spot ETF has experienced outflows for three consecutive days as of Monday, signaling a potential decrease in investor interest.
Additionally, MicroStrategy, a major institutional investor in Bitcoin, purchased 5,262 Bitcoin at a price of approximately $106,662 each. While this acquisition added to their total holdings, QCP analysts suggest that it represents the company's smallest purchase in recent weeks, raising questions about its appetite for Bitcoin at current price levels.
A Potential Christmas Rally for Bitcoin?
Unlike traditional assets like stocks, Bitcoin has not historically followed the typical Christmas rally pattern. While the S&P 500 index has a high probability of closing higher during the holiday period, Bitcoin has only experienced positive returns half of the time during Christmas rallies since 2010.
Tyler Richey, a technical analyst at Sevens Report Research, pointed out that since Bitcoin broke the $100,000 mark earlier this month, trading volumes have been steadily declining. This decrease in volume suggests a waning bullish sentiment in the market. However, Richey also notes that if Bitcoin breaks resistance levels between $100,000 and $101,500, it could lead to a recovery back toward its record highs of $106,000 to $108,000.
Technical Outlook for Bitcoin in the Short Term
From a technical perspective, Bitcoin's price action shows signs of potential further upward movement. If Bitcoin successfully breaches the $101,500 resistance level, it could make another attempt at reaching its previous all-time highs. On the other hand, failure to surpass this level could signal a bearish trend, with the next support zone potentially around $90,000.
If Bitcoin sets new record highs, the bullish technical trend would likely continue, with a price target of $118,000. However, much of this depends on broader market sentiment and any significant shifts in the macroeconomic landscape as we head into 2025.
Conclusion: Bullish But Uncertain in the Short-Term
While historical patterns suggest that Bitcoin could reach new heights in early 2025, the short-term outlook remains somewhat uncertain. Cooling market sentiment, declining trading volumes, and mixed investor signals could temper the optimism that typically accompanies Bitcoin's cycles.
