Historically, the price of Bitcoin reaches significant peaks roughly 20 months following a halving event. With the latest Bitcoin halving transpiring in April 2024, analysts predict that a cycle top might surface by December of this year. The increasing likelihood of this scenario was fueled by Federal Reserve Chair Jerome Powell’s recent decision to cut interest rates by 25 basis points. This move potentially incentivizes the approximately $7.4 trillion currently parked in money market funds to venture into alternative, hard assets like Bitcoin.
Furthermore, Powell hinted at the possibility of two additional rate cuts before the year concludes, which could diminish the returns from money market investments even further. This situation might prompt more investors to explore hard assets such as Bitcoin and gold, as well as equities in the tech and artificial intelligence sectors. Observers draw parallels between the current conditions and the tech stock surge seen at the end of 1999, which preceded the dot-com bubble burst.
Influential market strategists, including Henrik Zeberg and David Hunter, share the sentiment that the groundwork is being laid for a final explosive leg of a bull run that began in late 2022. As Zeberg articulated in 2022 amidst widespread bearishness, the stage is set for a “BlowOffTop,” which he contends is currently developing.
On a broader scale, Zeberg forecasts that the S&P 500 may surpass 7,000 by year’s end, while Hunter anticipates it could reach 8,000 or higher in the same timeframe. Notably, Dave Hcontrarian, who previously predicted an S&P target of 6,000 at the end of 2022 while others were projecting 2,000, has now elevated his target to 8,000, citing further potential upside before the economy falters later on.
Adding to the complexity, Macro Strategist Tavi Costa suggests that the U.S. dollar might be on the verge of breaking down a 14-year support level. If this occurs, it could lead to a noticeably weaker dollar in the coming months, further amplifying the case for investments in hard and risk assets.
Looking toward 2026, both Zeberg and Hunter believe that we might be approaching the largest market downturn since the October 1929 crash, which catalyzed the Great Depression. Zeberg bases this on signs of a slowing real economy, evidenced by the number of homes available on the market. He warns that despite claims of being in an early cycle, the economic landscape is positioning itself for a recession reminiscent of the 1930s.
Hunter posits that the economy is at the culmination of a decades-long debt-fueled cycle and is poised for a historic leverage unwind. This assertion is reinforced by indicators such as rising loan repayment delinquencies, which suggest an impending slowdown that could ripple through the financial ecosystem.
While it isn’t assured that Bitcoin will suffer a downturn, historical patterns indicate that its price could be vulnerable in 2026. Past trends show that Bitcoin’s value plummeted from nearly $69,000 at the end of 2021 to around $15,500 by the conclusion of the following year, and similarly, it fell from approximately $20,000 at the end of 2017 to just over $3,000 a year later. Presently, Bitcoin’s 200-week moving average stands at about $52,000. Should a parabolic rise occur in the coming months, prices might spike as high as $65,000 before a subsequent drop could follow in 2026. In the event of a broader market downturn as forecasted by strategists, Bitcoin’s value could dip significantly below this threshold.
Ultimately, while the future remains uncertain and this article should not be misconstrued as financial advice, it’s essential to acknowledge that while history may not repeat itself verbatim, it often exhibits similar patterns.
