Experienced bitcoin investors know that since that largest cryptocurrency debuted almost 17 years ago, it’s often moved in four-year cycles centering on halvings. Those events reduce the number of rewards accrued by miners.
Market participants who aren’t yet involved with bitcoin or ETFs like the Coinshares Valkyrie Bitcoin Fund (BRRR) can examine the cycle’s history. They’ll find the digital asset typically surges in the months immediately following the halving on its way to new highs before it succumbs to potentially substantial profit-taking. After that, it’d be range-before renewing its bullish ways into the end of the cycle/before the start of the next one.
Sounds like a lot to digest and for novice investors, it might be. But for HODLers and BRRR backers, there are indications they may not need to obsess over bitcoin cycles. Said another way, signs are mounting that the cryptocurrency’s cyclicality is waning.
On Wednesday, bitcoin flirted with $114,000. That indicates its recent local low could be a firm support area. Resistance around $113,000-$114,000 is vulnerable to cracking over the near term. Rekt Capital pointed out the importance of that resistance area. It noted bitcoin’s recent attempts to move through it have resulted in progressively smaller pullbacks.
“Really important BTC reclaims $114k as support in the [future. Because] otherwise, a rebound here could end up as a post-breakdown relief rally if $114k turns to resistance,” said the expert on X.
That price range is important for another reason. Data indicates there’s significant short positioning around those numbers and just below $113,000. Should bitcoin hover around there or appear likely break through $114,000 in earnest, bearish traders could bet antsy and cover those positions.
August was trying for bitcoin and BRRR investors. But that was expected because the eighth month of the year is historically tough on the king of cryptocurrencies. Yet there were some silver linings. Those include the fact that bitcoin’s move below $108,000 was bought up. That line in the sand is important. That’s because it could be a sign the current bull market still has gas in the tank.
“It’s unlikely Bitcoin has already peaked in its Bull Market because that would effectively mean that this cycle was one of the shortest of all time,” observed Rekt Capital. “If anything, cycles are getting slightly longer rather than shorter.”
That could be an indication bitcoin’s historical cyclicality is being altered, and old wisdom is, well, old.
