Coinbase, the second largest cryptocurrency exchange, has answered one of the questions that is on the minds of some investors: Has the current bull cycle of bitcoin (BTC) ended? The digital currency remains in a price range below the historical maximum that it reached four months ago, which generates this unknown. However, For the exchange, historical data indicates that the rise of bitcoin will continue. “We are most likely somewhere near the middle of the current cycle,” Coinbase emphasized in a detailed report. It specifies that the price pullback from the high is in line with what has been seen in the past. Bitcoin has experienced four market cycles so far in its history, with large gains and severe declines. In the current one, which began in November 2022 after hitting its low, the price multiplied 4 times. Such a performance is lower than the two previous bull markets (2015-2017 and 2018-2021), where it rose 100 times and 20 times, respectively. As seen below, in the previous cycles, bitcoin perceived on average nine drops of between 5% and 20%, three of 20% to 40% and one drop of up to 70%. In the current one, however, it shows less risk at the moment, with eight declines of 5% to 20% and two ranging from 20% to 30%. The deepest in 2024 has been 23% at the beginning of July from the historical maximum.
Bitcoin performance and declines by cycle. Source: Coinbase. “The 23% drop we saw in the first half of 2024 pales in comparison to the magnitude of the declines that marked the end of previous bull cycles, indicating that this cycle may have further to go,” Coinbase stresses. It highlights that “the price correction is healthy and a natural part of the current market cycle.”
Bitcoin shows a similar performance to the last two cycles
Coinbase notes that the current Bitcoin cycle resembles the last one, as well as the previous one, as it shows a similar increase in the same duration, 18 months. Such cycles followed the bull market for almost 18 more months, as the following chart shows.
The current cycle is shown in black, the one from 2018 to 2022 in green, and the one from 2015 to 2018 in light blue. Source: Coinbase. Therefore, if this pattern continues, bitcoin would reach the top of the current bullish cycle next year 2025. So far, as BitcoinDynamic reported, the highest historical price it recorded was $73,700 (USD) in March 2024. The exchange also distinguishes that, After halvings, the currency tends to temporarily sideways its priceas it is doing now. The last halving, an event that reduces the issuance of bitcoin by half every four years or so, occurred three months ago.
With ETFs, interest in bitcoin increased
Something that sets the current cycle apart from others is the presence of bitcoin exchange-traded funds (ETFs) on the largest stock market.United States. These instruments, which were launched six months ago, have already accumulated more than $50 billion in assets under management. “It is clear that bitcoin spot ETFs have helped to stimulate additional interest in cryptocurrencies and attract new investors to the market,” Coinbase believes. This is reflected in the increase since the launch of spot and futures trading volumes.
“The key takeaway from the dawn of the ETF era appears to be that they are good for investors, good for market liquidity, and good for the growth of crypto as an asset class” Coinbase, a crypto asset trading and custody services company.
Coinbase adds that this is reflected in the growth in the total value locked in cryptocurrency networks, active addresses, and the size of the user base. According to the exchange, this movement is driven by a variety of use cases, from lending to staking and trading. “We expect to see growth in adoption as existing use cases mature and new, innovative ones take hold,” the company concluded.