In a recent development, leading investment bank Morgan Stanley has weighed in on when the lingering Bitcoin bear market is likely to end. Interestingly, they share some similar views with analysts who have made predictions in the past.ย
Bitcoin Halving A Major Factor
In an article released by the investment bank, Morgan Stanley highlighted Bitcoinโs importance as the leading crypto and how the Bitcoin Halving, which is set to take place in April 2024, could affect its price and other crypto tokens by extension.ย
Bitcoin halving is a deflationary measure that occurs every four years, during which the rewards of miners are โhalvedโ, thereby creating scarcity. According to the bank, this event could potentially trigger a bull run as it has done in the past.ย
The article further noted how there have been such bull runs in the past following the three halving events that have occurred and how the bull run lasted for 12 to 18 months after then.ย
Morgan Stanleyโs prediction echoes that of several crypto analysts who have predicted that the Bitcoin Halving could spark the next bull run. Specifically, the co-founder of Delphi Digital, Kevin Kell, while highlighting metrics that showed that the next bull run was close, noted that Bitcoin has broken to a new all-time high (ATH) seven months after the last two halvings occurred.
Understanding The Four Phases Of Crypto
While trying to avoid giving a definite time as to when to invest ahead of the next bull run, Morgan Stanley noted the importance of learning about the โfour phases of cryptocurrency pricesโ in order for one to make a conviction play as to the right time to invest. These four phases are said to correspond roughly to the four seasons of the year.ย
The first phase is โSummerโ when Bitcoin experiences the most gains, which comes after the halving. The bull run is said to begin with the event and continue when Bitcoinโs price hits its prior peak. The next is the โFallโ when the price โsurpasses the old high.โ This is the period when the bull market runs its full course after reaching a new high.
After โFallโ comes โWinterโ, which is when the bear market surfaces as this is the period that investors are locking in their gains, resulting in a massive sell-off. This usually occurs between the โnew peak and the next trough.โ Historically, there have been three winters, with each of them lasting for about 13 months.ย
โSpringโ is the last phase in the cycle and the one that potentially kickstarts the next bull run (another Summer). This is the period โpreceding each halving,โ when Bitcoinโs price โgenerally recovers from the cycleโs low point, but investor interest tends to be weak.โ
By understanding these phases, crypto investors could be well-prepared to take advantage of the next bull run to make the most profits.
BTC continues recovery as sentiment recovers | Source: BTCUSD on Tradingview.com
Featured image from Forbes, chart from Tradingview.com
