The crypto market has always been rather confusing and difficult to navigate, not only due to its newness and the complexity of its underpinning technology but also because of the unexpected price movements and successive stages of rise and decline commonly referred to as bull and bear markets. So, it obviously takes a lot more than knowing where to buy Bitcoin or learning how to read a chart to become an astute investor.
Bear markets can be scary and wreak havoc on investors’ portfolios. Still, they can also be seen as an opportunity to accumulate holdings and generate profit by buying assets when the prices are low and then selling them when the market recovers. This strategy in crypto lingo is known as buying the dip and selling the rip. That implies proper risk management and good timing of the market.
Unfortunately, given the multitude of factors influencing the cryptocurrency industry, predicting its future seems next to impossible. No one can know for sure when a bull run is going to start or when prices might go down. But what we do know based on crypto’s short existence, is that the crypto market just like all other markets is cyclical, following a pattern of highs and lows, and Bitcoin is the one leading these trends.
At the moment, the cryptocurrency sector is still reeling after the latest crypto winter which, according to experts, was the worst one to date. This means that there’s no way but up from here. So, if history is going to repeat itself once again, we could find more answers about the next bull market by analyzing Bitcoin’s price movements over the years.
A recap of bull runs past
Since its creation, Bitcoin, and by extension the crypto market, has experienced three important bull runs. For those who want to adopt the buy low, sell high strategy, bull markets represent the opportune moment to put their plan into action, as we’ve come to learn from the past.
Bitcoin’s first significant bull run started in November 2011 and reached its peak in November 2013, when the coin managed to surpass the $1,000 threshold for the first time. Most analysts agree that the European debt crisis which started when Greece’s sovereign debt increased to 113% of GDP was the event that most likely pulled Bitcoin out of the shadows of the financial system and fueled people’s interest in digital currencies in the first place.
With trust in governments and major institutions reaching an all-time low, people started looking for alternatives to manage their finances and crypto seemed to fit the bill for many. Before that, Bitcoin was largely ignored or associated with illicit activities such as money laundering, fraud, financial evasions and other corruption-related crimes. This caused a shift in the public’s mentality and perception of digital assets, leading to significant price appreciation for Bitcoin.
After the long period of decline that followed, Bitcoin’s value began to pick up again in the second half of 2016, signaling the approach of a second major bull market. Bitcoin continued to increase in price for the rest of the year and then rallied all throughout 2017 until it reached a new record high of a little over $20,000 in December. As happened previously, a price correction started soon after, and the king of crypto hit the bottom in December 2018. If we take a look at the timeline, we can see that the two bull runs are nearly four years apart and after each peak, it took Bitcoin almost a year to reach its lowest point.
Bitcoin’s latest and biggest bull run to date started in 2019 and lasted until November 2021, when the flagship coin registered a meteoric rise and touched a staggering value of $68,770. This bullish run was largely attributed to the massive media coverage and celebrity endorsements that digital currencies enjoyed at the time, creating a lot of buzz around this innovative asset class.
The subsequent decline saw Bitcoin plummet to $15,600, which was hit in November of 2022, and although the downturn was sharp, it was not unexpected at this point. Timewise, Bitcoin followed its usual pattern, peaking almost four years after the latest bull market and slumping one year after hitting e new record high. Also, all three bull runs started approximately one year before Bitcoin halving – the event that cuts Bitcoin mining rewards in half once every four years or so.
Considering that the next halving is expected to occur in April 2024 and given Bitcoin’s price appreciation over the past few months, experts believe that the crypto leader might be on the brink of a new bull run. If Bitcoin is going to follow the same trajectory as it did in the past, this means that crypto prices will pick up steam halfway through 2024 and reach new all-time highs by the end of 2025. That’s quite an encouraging outlook that might prompt traders and investors to ramp up their activity in the market after a long period marked by intense volatility and low confidence.
The scenario above instills hope in the crypto community which has long been waiting for some good news after the dreadful crypto winter. However, stakeholders need to keep in mind that things are not that black and white in the crypto space, so it would be a mistake to base investment decisions on one indicator alone.
While there are undeniable similarities between Bitcoin’s past bull runs, we also need to acknowledge the fact that each bull market had its own particularities and none of these events were completely identical. Times have changed and the crypto industry continues to change with them, so there’s no guarantee that events in the crypto market will play out as expected. Only time will tell if these optimistic predictions will come true or not.