Based on historical performance, Bitcoin’s continuous weekly gains could soon propel it to a new record high.
Bitcoin’s recent streak of weekly gains has placed its record high within reach, according to some analysts. Despite the crypto market’s struggles just a year ago, with Bitcoin’s potential to retest its almost $69,000 peak seeming improbable, current indicators suggest a different story.
Technical analysis comparing Bitcoin’s surge to $52,000 with previous rallies suggests further gains in the coming weeks. While historical patterns can offer insights, they may not always predict the future accurately, especially for a volatile asset like Bitcoin.
The price of Bitcoin has tripled since the beginning of 2023, driven by optimism surrounding dedicated US exchange-traded funds. An impending reduction in the token’s supply growth through halving. This rally includes four consecutive weeks of increases up to Feb. 18. Over the past five years, after such four-week winning streaks, Bitcoin has, on average. Climbed about 49% over the following three months, potentially taking it to $78,000.
Richard Galvin, founder of crypto-focused investment firm DACM, believes that the market conditions for Bitcoin remain robust. However, Elliott Wave studies suggest a possible pullback to around $40,000 before a surge to approximately $70,000, which would surpass Bitcoin’s previous all-time high of $68,992 in November 2021.
Bitcoin’s Price
In the derivatives market, Bitcoin call spreads are currently popular among speculators. Data from Deribit, the largest crypto options exchange, indicates that investors anticipate further Bitcoin gains, though not necessarily significant ones. A bull call spread, a common strategy, involves buying a call option while simultaneously selling a contract of the same maturity at a higher strike price.
Caroline Mauron, co-founder of digital-asset derivatives liquidity provider Orbit Markets, noted that the options market is pricing the probability of Bitcoin reaching a new all-time high before halving at around 20% to 25%, which seems reasonable.
Bitcoin’s price stood at $52,333 as of 8:20 a.m. in New York on Monday, close to its highest level in over two years. Additionally, among smaller coins, Worldcoin, a token from a project co-founded by OpenAI’s Sam Altman, surged around 40% in the past 24 hours, according to CoinGecko figures.
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“This data underscores considerably stronger profitability in the mining sector compared to challenges experienced in 2022 and part of 2023.”
In approximately six months, Bitcoin undergo a “halving,” reducing the new bitcoins awarded to miners by half. Satoshi Nakamoto introduced this event in 2009 as an anti-inflationary measure. Occurring roughly every four years, the lead-up to halvings traditionally proves the most profitable time for crypto investors. “Buying bitcoin six months before a halving and selling 18 months after has historically outperformed a ‘buy and hold’ strategy,” affirms the analyst.
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