Morgan Stanley Wealth Management said in an article published on its website on Tuesday (17th) that the cryptocurrency winter - the cyclical bear market decline of Bitcoin (BTC) - may be over. Morgan Stanley strategist Denny Galindo wrote:
"Based on current data, there are signs that the cryptocurrency winter may be over, and the cryptocurrency spring is likely to be around the corner."
Based on Bitcoin's trading history, Galindo said that the four-year cryptocurrency cycle can be roughly divided into four "seasons." In previous crypto winters, Bitcoin's troughs occurred 12 to 14 months after the price peak. Bitcoin reached an all-time high of around $68,000 in November 2021 before bottoming out a year later.
Bitcoin price historical trend (Source: TradingView)
According to this article's definition of cryptocurrency "spring", during the period before each Bitcoin halving, Bitcoin prices usually rebound from the cycle low, but investor interest is often low. Galindo said, "A 50% rise in Bitcoin prices from a low is usually a good sign that the bottom has arrived." Bitcoin is up 70% so far this year and is up about 77% from last year’s lows.
Additionally, Galindo believes the magnitude of Bitcoin’s decline is also important, with price troughs in past Bitcoin cycles falling approximately 83% relative to their respective highs.
Galindo said that most of Bitcoin's gains usually occur after halving, and that the cryptocurrency's "summer" bull run begins with the halving event and ends when Bitcoin prices hit the peak of the previous cycle. He believes that the shortage caused by the halving will affect the price of Bitcoin, which may trigger a bull market. He noted that there have been three such rallies since Bitcoin’s inception, each lasting 12 to 18 months after the halving. The next halving event is expected to occur in April 2024.
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