Bitcoin ‘parabolic’ rally may start in Q4, according to historical price data
2024.08.21 14:16
Bitcoin (BTC) had a good start to 2024, rising over 40% year-to-date. This was fueled by a number of positive fundamental factors, including the launch of spot Bitcoin exchange-traded funds in the United States and the halving event, which reduced the amount of BTC awarded to miners by 50%.
Unlike previous cycles, Bitcoin price hit new all-time highs before the halving, leading many analysts to predict a supercycle within the current halving year.
More than 123 days have passed since the Bitcoin halving, and BTC’s price is yet to surpass its pre-halving all-time high. Bitcoin is down 13% over the last month and 14% over the last 30 days. This has left market analysts debating whether Bitcoin will launch a rally during the fourth quarter of 2024.
Veteran trader and analyst Peter Brandt said that the current market cycle could soon be the longest in post-halving history, adding that it could either indicate that a new all-time high will take longer to come or it’s “not in the cards.”
Source: Peter Brandt
Data from CoinGlass reveals that Bitcoin has always had positive returns in Q4 during halving years, posting 58% and 168% gains in 2016 and 2020, respectively. Moreover, BTC’s price has posted positive returns in eight out of the 11 years between 2013 and 2023, with average gains of 88%.
Bitcoin quarterly returns (%). Source: CoinGlass
If history is any guide, there is a 73% chance that Bitcoin will rally in the fourth quarter of 2024.
CryptoQuant founder and CEO Ki Young Ju analyzed Bitcoin’s price action during the 2020 halving and found that the rally began in Q4.
“In the last Bitcoin halving cycle, the bull rally began in Q4. Whales won’t let Q4 be boring with a flat YoY performance.”
Bitcoin: Cumulative return index on halving years (start of year = 1). Source: CryptoQuant
According to Ju, Bitcoin’s price is in an accumulation phase, suggesting that it could possibly initiate a parabolic uptrend once it enters the last quarter of 2024.
The 200-day EMA poses stiff resistance for Bitcoin’s price
Data from Cointelegraph Markets Pro and TradingView shows Bitcoin’s price action has formed a series of higher lows on the daily chart but has remained below the 200-day exponential moving average (EMA) over the last seven days.
BTC/USD daily chart. Source: TradingView
The In/Out of the Money Around Price (IOMAP) model by IntoTheBlock reveals that Bitcoin faces relatively stiff resistance in its recovery path, compared to the support it enjoys on the downside.
The 200-day EMA at $59,423 is found close to the $59,500–$61,300 price range, where approximately 817,770 BTC was previously bought by about 1.51 million addresses.
Bitcoin IOMAP chart. Source: IntoTheBlock
This suggests that high demand-side liquidity is required to push BTC’s price past the 200-day EMA and later above resistance provided by the 50- and 100-day EMAs at $61,383 and $62,323, respectively, breaking it out of the current consolidation.
If this doesn’t happen, analyst Mark Cullen said Bitcoin’s price could drop toward $57,500 or even lower to revisit the $54,500 level.
Source: Mark Cullen
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
