The Beginning of the Next Bull Market in Cryptocurrencies
“Bitcoin Bear Market Has Ended”
The cryptocurrency market is known for its unpredictability. However, Kevin Kelly, CEO of Delphi Digital, a prominent crypto market researcher, believes that the market is actually quite predictable. He argues that cryptocurrencies are strongly correlated with other risky assets, which in turn follow the general trends of the economy.
Predictable Cycles in the Cryptocurrency Market
According to Kelly, major changes in the crypto market can be reflected by the business cycle. This cycle can be measured to a certain extent by the ISM Manufacturing Index, which tends to peak when the number of active wallet addresses in the crypto world also reaches its highest point.
Data Supports the Claim
The crypto market is highly cyclical.
Crypto market cycles are also remarkably consistent.
But their consistency isn’t just by coincidence.
They’re predictable.
If we’re right, this has huge implications for the crypto market going forward.
Time to air out some charts… 👇
— Kevin Kelly (@Kevin_Kelly_II) August 14, 2023
The End of the Bear Market and the Next Peak
Kelly argues that both the ISM Manufacturing Index and the annual price change of Bitcoin suggest that the bear market has come to an end. Despite concerns of prolonged inflation, higher interest rates, and an impending recession, Kelly disagrees with the notion that we are currently in a bear market rally that could push prices even lower than the previous bottom reached in December of last year.
Comparison to the Market in 2015 and 2016
According to Kelly, the current market resembles the market of 2015 and 2016, when uncertainty was also prevalent. The fear of a continuation of the global financial crisis at that time turned out to be unfounded. This led to significant increases in both stocks and cryptocurrencies.
The Cyclical Nature of the Market
The ISM Manufacturing Index follows a cycle of approximately 3.5 years, which interestingly aligns quite closely with the Bitcoin halving cycle that occurs every 4 years. The next halving event is expected to take place around April 2024. This suggests that the next all-time high in Bitcoin’s price will likely occur in the fourth quarter of 2024, with the next peak of the crypto market expected in the fourth quarter of 2025. Only time will tell if Kelly’s predictions come true.